some of adam’s equpment is leased, annual (eoy) lease payments are eur 10 mil for the next 6 years ( including 12-31-18 pmt) and the avg interest rate on the leases is 6.4% . to make financial  statements comparable with the rest, analyst B adjusts them by replacing the operating leases with financial leases as of 1/1/2018 , he assumes leased equipment has zero salvage value.

other given data : total assets 2018: 856,750 ; ebt: 23150 ; income taxes : 7000; int income : 20000 ; ebit 43150

Starting with mike’s existing financial statements and assuming that the income tax rate does not change, adjustments for mike’s leases will results in a value of assets on 31 dec 18?

options :

a.897218,

b. 897581 ,

c. 905311