Using a Calculator and Present Value Table to Impute Interest Rate and Determine Present Value of Operating Leases AutoZone reports the following in its 2015 Form 10-K.

The Company leases some of its retail stores, distribution centers, facilities, land and equipment, including vehicles. Other than vehicle leases, most of the leases are operating leases. . . .

The Company has a fleet of vehicles used for delivery to its commercial customers and stores and travel for members of field management. The majority of these vehicles are held under capital lease.

Future minimum annual rental commitments under non-cancelable operating leases and capital leases were as follows at the end of fiscal 2015:

$ thousands Operating Leases Capital Leases 2016 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 259,175 $ 40,528 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250,787 40,562 2018 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234,640 28,558 2019 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215,692 16,845 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192,882 5,077 Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 905,629 —

Total minimum payments required . . . . . . . . . . . . . . . . . . . . . $2,058,805 131,570 Less: Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,403)

Present value of minimum capital lease payments . . . . . . . . $128,167 Required a???? Use a financial calculator to impute the implicit rate of return (to three decimal places) on the capital leases.

b???? Assume that the appropriate discount rate for the operating leases is 1.16%. Use a financial calculator to determine the present value of the future minimum operating lease payments.

c???? Assume that the appropriate discount rate for the operating leases is 1%. Use present value tables to determine the present value of the future minimum operating lease payments.