Reference no: EM132068288

Question 1  : In its annual report Driver Enterprises reported total debt of $718 and total assets of $2,859. In a footnote, the company also reported that it had future operating lease obligations of $161 per year for each of the next 6 years. The firm pays 9% on its debt financing. Using the 1/3-2/3 methodology, what would be the debt ratio of the firm after incorporating the impact of the operating leases? Present your answer in percentage terms, rounded to two decimal places, e.g., 20.00%.

Question 2  : Driver Enterprises reports 2017 earnings before interest and taxes (EBIT) of $380,296 and interest expense of $33,250. The company reported in a footnote that included in the operating expenses reported on the income statement were operating lease rental expenses of $126,000. It also reported the interest expenses of $26,993 were capitalized. The present value of the company's future lease obligations has been determined to be $355,646, based on footnote data and a discount rate of 12%. Calculate the fixed charge coverage ratio after incorporating the impact of the operating leases using the 1/3-2/3 method. Present your answer rounded to two decimal places, e.g., 20.00.

Question 3  : In its annual report Driver Enterprises reported total debt of $312 and total assets of $2,576. Reviewing a footnote you have found that the company has ten years of operating lease obligations of $37 per year. The company faces a cost of debt of 6%. Calculate the debt ratio for the company after incorporating the lease obligations using the present value method. Present your answer in percentage terms, rounded to two decimal places, e.g., 20.00%.

Question 4  : Driver Enterprises reports 2017 earnings before interest and taxes (EBIT) of $942,664 and interest expense of $62,158. The company explained in a footnote that included in the operating expenses reported on the income statement were operating lease rental expenses of $155,816. The company reported in a separate footnote that it had capitalized interest of $7,802 during the year.  Calculate the interest coverage ratio. Present your answer rounded to two decimal places, e.g., 20.00.

Question 5  : In a footnote on its 2017 annual report Hewlett Packard reported the following operating lease obligations (in $ millions):

Year	Amount
2018	10,843
2019	9,442
2020	7,653
2021	4,072
2022	3,571
After 2022	19,038

 

Calculate the present value of the future operating lease obligations, assuming a discount rate of  8%.

Question 6  : In a footnote on its 2017 annual report Hewlett Packard reported the following operating lease obligations (in $ millions):

Year	Amount
2018	9,525
2019	8,160
2020	6,440
2021	5,665
2022	3,381

Calculate the present value of the future operating lease obligations, assuming a discount rate of 6%.

Question 7  :  Driver Enterprises reports 2017 earnings before interest and taxes (EBIT) of $498,430 and interest expense of $30,477. The company explained in a footnote that included in the operating expenses reported on the income statement were operating lease rental expenses of $125,002. The present value of the company's future operating lease obligations has been determined to be $238,158, based on footnote data and a discount rate of 11%. Calculate the fixed charge coverage ratio after incorporating the impact of the operating leases using the present value method. Present your answer rounded to two decimal places, e.g., 20.00.

Question 8  : Driver Enterprises reports 2017 earnings before interest and taxes (EBIT) of $560,708 and interest expense of $60,797. The company explained in a footnote that included in the operating expenses reported on its income statement were operating lease rental expenses of $147,000. The present value of the company's future lease obligations has been determined to be $553,813, based on footnote data and a discount rate of 11%. Calculate the fixed charge coverage ratio after incorporating the impact of the operating leases using the 1/3-2/3 method. Present your answer rounded to two decimal places, e.g., 20.00.

Question 9  : In its annual report Driver Enterprises reported total debt of $669 and total assets of $1,909. Reviewing its footnote,you have determined that the present value of its future lease obligations to be $231. What would be the debt ratio of the firm after incorporating the impact of the operating leases? Present your answer in percentage terms, rounded to two decimal places, e.g., 20.00%.

Question 10  : In a footnote on its 2017 annual report Hewlett Packard reported the following operating lease obligations (in $ millions):

Year	Amount
2018	11,145
2019	9,683
2020	6,932
2021	5,755
2022	2,000
After 2022	8,000

Calculate the present value of the future operating lease obligations, assuming a discount rate of  8%.