XYZ has the following operating lease commitments:

Year	Operating Lease Commitment
1	55
2	60
3	60
4	55
5	50
6-15	40 each year

XYZ has as well:

EBIT of $150 million (Last annual report; year t)

Operating lease expenses of $50 million(Last annual report; year t)

Book value of equity is $1 billion (Previous annual report, year t -1)

Cost of equity of 11%

Book value of interest bearing debt $200 million (Previous annual report, year t -1).

Pretax cost of borrowing of 6%.

Marginal tax rate is 40%.

Nonoperating assets of $200 million including cash and marketables ((Previous annual report, year t -1)

Estimate the return on capital, before and after adjusting for operating leases assuming that the PV of leases didnt change