please complete problems 1 and 12

1. Derra Foods is a specialty food retailer. In its balance sheet, the firm reports $1 billion in book value of equity and no debt, but it has operating leases on all its stores. In the most recent year, the firm made $85 million in operating lease payments and its commitments to make lease payments for the next 5 years and beyond are summarized. Year Operating Lease Expense $ 90 million $ 90 million $ 85 million $ 80 million $ 80 million 6-10 $ 75 million annually If the firm's current cost of borrowing is 7%, estimate the debt value of operating leases. Estimate the book value debt to equity ratio. 12. Assume that Derra Foods, in problem 1. reported earnings before interest and taxes (with operating leases expensed) of $200 million. Estimate the adjusted operating income. assuming that operating leases are capitalized