A recent annual report for Exxon included the following note:

You are a lending officer for a large commercial bank and for comparative purposes want to compute the present values of these leases.
Required:
Determine the present value of the minimum lease payments shown as of December 31. 1998. You may assume an interest rate of 10 percent. Identify other assumptions that you must make.

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At December 31, 1998, the corporation and its subsidiaries held noncancelable leases covering drilling equipment, tankers, service stations and other properties with minimum lease commitments as indicated in the table. Years Minimum Commitment (in millions) 1999 $ 864 2000 713 2001 564 2002 488 2003 373 2004 and beyond 1,448