1. Retail Inc. has both operating and capital leases. Below is a portion of its lease footnote taken from its 2006 financial statements. FOR A AND B and C TYPE IN ANSWER AND HOW YOU GOT IT a. Obtain a crude estimate of the remaining length of the operating and capital leases.

b. Estimate the interest rate implicit in the capital leases.

1. Compute the present value of the operating leases using an 8% rate which is not the answer to part b above.

Capital Operating $ 233 201 100 180 MLP (in millions) 2007 2008 2009 2010 2011 Thereafter Total MLP Lett interest Present Value of MLP Current portion Long-Term portion $ 397 $ 425 $ 416 $ 405 $ 396 $ 2,376 $ 4,415 145 1,050 $ 3,008 680 $ 1,328 100 $ 1,228 Capital Operating $ 233 201 100 180 MLP (in millions) 2007 2008 2009 2010 2011 Thereafter Total MLP Lett interest Present Value of MLP Current portion Long-Term portion $ 397 $ 425 $ 416 $ 405 $ 396 $ 2,376 $ 4,415 145 1,050 $ 3,008 680 $ 1,328 100 $ 1,228