Walmart sometimes leases their store locations and distribution centers. This type of leasing is common practice for retail outlets. Note 11 to Walmart's consolidated financial statements for the fiscal year ending January 31, 2016 (available for download in the investor relations section of Walmart's website), provides information on future operating lease commitments. Required 1. Effectively capitalize the operating lease obligations. You must first choose and justify an interest ruse. Assume that all cash flows occur at the end of each year. 2. Recompute the long-term debt to long-term capital ratio using your capitalized operating leases. Comment on the results. 11. Commitments The Company has long-term leases for stores and equipment. Rentals (including amounts applicable to taxes, insurance, maintenance, other operating expenses and contingent rentals) under operating leases and other short-term rental arrangements were $2.5 billion in fiscal 2016 and $2.8 billlon in both fiscal 2015 and 2014. Aggregate minimum annual rentals at January 31,2016 , under. fentals based on a percentage of sales. Such contingent rentals were not material for fiscal 2016, 2015 and 2014. Substantially all of the Compary/s store leases have renewal options, some of which may trigger an escalation in rentals