Please solve the following 2 questions and explain the steps to me and show work. I can tip via paypal or w/e is easy for you.

Following lease footnote disclosure is provided by the Company:

Note 5.Lease Commitments

The Company leases some of its facilities and equipment under various operating and capital leases.The lease agreements frequently include renewal and purchase provisions and require the Company to pay taxes, insurance, and maintenance costs.

Total rental expense under operating leases was $11,244,000, $9,986,000, and $8,854,000 in 2014, 2015, and 2016, respectively.

The following is a schedule of future minimum lease payments under capital leases and rental payments required under long-term operating leases at the end of the 2016 fiscal year (in $ thousands):

Fiscal years

Operating Leases

Capital leases

2017

$8,494

$121

2018

6,835

2019

4,952

2020

4,740

2021

5,020

Later years

17,850

Total

$47,891

$121

Less amount representing interest

(11)

Present value of minimum lease payments

$110

Assume that all lease payments are made at the end of the year.

(Required)

1.Estimate the interest rate implicit in the company's capital lease obligation.

1. Use the interest rate in (1) to estimate the present value of the operating lease payments as of the end of the 2016 fiscal year.When doing so, assume that the payments due after 2021 are equal and will be made over a four-year period.
2. Indicate (higher, lower, or no change) & briefly explain the impact on the Company's 2016 interest coverage, debt-to-equity ratios, ROA, CFO (operating cash flow), and CFF (financing cash flow), if the operating leases were instead accounted for as capital leases in 2016.

Problem 2 (50%)

The following pension footnote disclosure is provided by the Company:

Note 8: Pension

The company has a defined benefit pension plan covering substantially all of its employees.Pension benefits are based on employee service years and the employee's compensation during the last two years of employment.The company contributes annually the maximum amount permitted by the federal tax code.Plan contributions provide for benefits expected to be earned in the future as well as those earned to date.The following reconciles the plan's funded status and amount recognized in the balance sheet at December 31, 2016 ($ in 000s).

Actuarial Present Value Benefit Obligations:

Accumulated benefit obligation (including vested benefits of $318)

$(1,305)

Projected benefit obligation

(1,800)

Plan assets at fair value

1,575

Project benefit obligation in excess of plan assets

$(225)

The Company's comparative I/S reported net periodic pension expense of $108,000 in 2016 and $86,520 in 2015.Since employment has remained fairly constant in recent years, its management expressed concern over the increase in the pension expense.

(Required)

1. Describe the differences and similarities between ABO and PBO.
2. Explain how the 'Projected benefit obligation in excess of plan asset' is reported in the financial statement.
3. With a pressure from earnings target from the market and a possibility of reduced annual bonuses tied to reported earnings, management of the Company may try to sacrifice the quality of reported earnings for the next fiscal year.Identify & briefly explain the actuarial assumption factors that can reduce the reported periodic pension expense.(For example, an increase in discount rate would reduce pension expense, because of lower service cost)