QUESTION $26$

Please find the present value of operating leases for a firm given the following information.

Equipment has been leased for a period of five years.

The annual lease payment is $100$ Million per year.

The pre$-$tax cost of debt is $7\%,$ the riskfree rate is $6\%$ and the market risk premium is $4\%.$

$$28\mathrm{.}70$ Million

$$500$ Million

$$410$ Million

$$438$ Million

$q,$

QUESTION $27$

Return on Invested Capital increases as

EBIT increases

Tax rate increases

Book value of Debt increases

A and $B$

A and $C$