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Unformatted text preview: Companies try to avoid these Relatively easy to do As analyst we must assume that all operating leases should be capital leases o Ex. Best Buy: Convert operating leases to capital leases Add up years 1 through X Payment x discount factor = PV Sum up PVs and put in B/S as assets Lease balance x .09 = interest Payment interest = lease obligation Previous year lease balance lease obligation = current year lease balance...
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