Question

YUM! Brands, Inc., reports the following footnote relating to its capital and operating leases in its 2015 10-K report ($ millions). Future minimum commitments under noncancelable leases are set forth below. At December 26, 2015, the present value of minimum payments under capital leases was $169 million.

Commitments ($ millions)	Capital	Operating
2016	$20	$672
2017	20	620
2018	20	569
2019	20	516
2020	19	457
Thereafter	188	2,123
	$287	$4,957

Confirm that the implicit rate on YUM!'s capital leases is 7.634%.

N              Amount          IRR

0               (169)             7.634%

1                20

2                20

3                20

4                20

5                19

6                19

7                19

8                19

9                19

10              19

11              19

12              19

13              19

14               19

15               ????????

Using a 7.634% 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.)

$ in millions                 Present Value

Year 1                         624

Year 2                         535

Year 3                         456

Year 4                         384

Year 5                         316

After 5                         ???

Total                            ???