PLEASE ANSWER PART B.

Analyzing, Interpreting and Capitalizing Operating Leases Assume YUM! Brands, Inc., reports the following footnote relating to its capital and operating leases in its 2010 10-K report ($ millions). Future minimum commitments under non-cancelable leases are set forth below. At December 25, 2010, and December 26, 2009, the present value of minimum payments under capital leases was $245 million and $228 million, respectively.

*** (B) Using a 8.36% discount rate and rounding the remaining lease life to three decimal places, compute the present value of YUM!'s operating leases. (Use a financial calculator or Excel to compute. Do not round until your final answers. Round each answer to the nearest whole number.)

$422 339 Commitments ($ millione) Capital Operating 2011 $ 27 2012 367 2013 2014 378 2015 280 Thereafter 276 1,964 $441 $3,750 No (a) Confirm that the implicit rate on YUM!'s capital leases is 8.36%. NAmount IRR (245) 8.36 27 ($ millions) Present Value Year 1 Year 2 Year 3 Year 4 Year 5 After 5 Total* U*(Use subsequent rounded answers for calculation.) $422 339 Commitments ($ millione) Capital Operating 2011 $ 27 2012 367 2013 2014 378 2015 280 Thereafter 276 1,964 $441 $3,750 No (a) Confirm that the implicit rate on YUM!'s capital leases is 8.36%. NAmount IRR (245) 8.36 27 ($ millions) Present Value Year 1 Year 2 Year 3 Year 4 Year 5 After 5 Total* U*(Use subsequent rounded answers for calculation.)