Question: Taco Shell Inc. is a restaurant with operating lease commitments of $30 million a year for the next 8 years. It has a cost of

Taco Shell Inc. is a restaurant with operating lease commitments of $30 million a year for the next 8 years. It has a cost of capital of 8%, a cost of equity of 10%, a pre-tax cost of debt of 4% and an after-tax cost of debt of 2.5%. What is the asset value of operating leases?

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