8. Direct Computation of Nonoperating Return with Noncontrolling Interest Refer to the financial information of Costco Wholesale Corporation in P3-47 to answer the following requirements. In 2018, Costco's return on equity (ROE) is 26.59% and its retum on net operating assets (RNOA) is 26.52%. Required a. Compute net nonoperating expense (NNE) and net operating profit after tax (NOPAT). b. Compute net nonoperating obligations (NNO) for 2018 and 2017. c. Compute financial leverage (FLEV). d. Compute NNEP and Spread. e. Compute the noncontrolling interest ratio (NCI ratio). f. Confirm the relation: ROE=[RNOA+ (FLEV Spread) ] NCI ratio. g. What does the breakdown of nonoperating return imply about the company's use of borrowed funds? COSTCO WHOLESALE CORPORATION Consolldated Statement of income For Flscal Years Ended (s millilons) September 2, 2018 Total revenue ..................................... $141,576 Operating expenses Merchandise costs ............. Preopening expenses. Operating income . Other (income) expense Interest expense .......... 123,15213,876684,480 Income before income taxes Provision for income taxes. Net income including noncontrolling interests Net income attributable to noncontrolling interests. 159 (121) Net income attributable to Costco ....5. COSTCO WHOLESALE CORPORATION Consolldated Balance Sheets S millions, except par value and share data September 2, 2018 September 3, 2017 Current assets Cash and cash equivalents. Short-term investments. Receivables, net . . Merchandise inventories. Other current assets Total current assets Net property and equipment. Other assets ... Total assets Current liabilities oontinued from previous page Continued, S millions, except par value September 2, 2018 September 3, 2017 Equity Preterred stock $0.01 par value Common stock $0.01 par value Additional paid-in capital. Accumulated other comprehensive loss. Retained earnings Total Costoo stockholders' equity. Noncontrolling interests Total equity. Total liabilities and equity \begin{tabular}{rr} 0 & 0 \\ 4 & 4 \\ 6,107 & 5,800 \\ (1,199) & (1,014) \\ 7,887 & 5,988 \\ \hline 12,799 & 10,778 \\ 304 & 301 \\ \hline 13,103 & 11,079 \\ \hline$40,830 & $36,347 \\ \hline \hline \end{tabular}