he should increase reported total liabilities by an amount closest to

/in /by

The notes to the financial statements of Bargain Apparel Corp. disclose that the company has finance lease commitments with minimum future payments of $20 million, of which $6 million represents interest payments. It also has operating leases with minimum future payments of $25 million. If Robert Xu, CFA, wishes to adjust the financial statements to treat all leases as debt, he should increase reported total liabilities by an amount closest to

a. $17.5 million.

b. $25.0 million.

c. $45.0 million.