Refer to the financial information of Amgen, Inc. in P4-44 to answer the following requirements.

\section*{Required}

a. Assume that 2007 net nonoperating expenses (NNE) are \(\$ 12\) million and that 2007 RNOA is \(13.55 \%\). Compute financial leverage (FLEV) and Spread for 2007.

b. Assume that 2007 return on equity (ROE) is \(17.14 \%\). Confirm computations to yield the relation: \(\mathrm{ROE}=\mathrm{RNOA}+(\mathrm{FLEV} \times\) Spread \()\).

c. What do your computations of the nonoperating return in parts \(a\) and \(b\) imply about the company's use of borrowed funds?