(a) Compute net operating profit after tax (NOPAT) for 2010. Assume that the combined federal and statutory rate is: 37.0%. (Hint: Treat equity in income of affiliates as operating. Round your answer to the nearest whole number.)

2010 NOPAT =  ($ millions)

(b) Compute net operating assets (NOA) for 2010 and 2009. (Hint: Treat the Equity and Other Investments and the Long-Term Liabilities as operating.)

2010 NOA =  ($ millions)
2009 NOA =  ($ millions)

(c) Compute Best Buy's RNOA, net operating profit margin (NOPM) and net operating asset turnover (NOAT) for 2010. (Do not round until final answer. Round two decimal places. Do not use NOPM x NOAT to calculate RNOA.)

2010 RNOA = %
2010 NOPM = %
2010 NOAT = 

(d) Compute net nonoperating obligations (NNO) for 2010 and 2009.

2010 NNO =  ($ millions)
2009 NNO =  ($ millions)

(e) Compute return on equity (ROE) for 2010. (Round your answers to two decimal places. Do not round until your final answer.)

2010 ROE = %

(f) Infer the nonoperating return component of ROE for 2010. 

2010 nonoperating return = %

(g) Which of the following statements reflects the best inference we can draw from the difference between Best Buy's ROE and RNOA?

ROE > RNOA implies that Best Buy's equity has grown faster than its NOA.

ROE > RNOA implies that Best Buy has taken on too much financial leverage.

ROE > RNOA implies that Best Buy is able to borrow money to fund operating assets that yield a return greater than its cost of debt; the excess accrues to the benefit of Best Buy's stockholders.

ROE > RNOA implies that Best Buy has increased its financial leverage during the period.

Balance sheets and income statements for 3M Company follow. Consolidated Statements of Income Years ended December 31 ($ millions) 2010 2009 2008 Net sales $26,662 $23,123 $25.269 Operating expenses Cost of sales 13,831 12,109 13,379 Selling, general and administrative expenses 5,479 4,907 5,245 Research, development and related expenses 1,434 1,293 1,404 Loss/(gain) from sale of business 23 Total operating expenses 20,744 18,309 20,051 Operating income 5,918 4,814 5,218 Interest expenses and income Interest expense 201 219 215 Interest income (38) (37) (105) Total interest expense 163 182 110 Income before income taxes 5,755 4,632 5,108 Provision for income taxes 1,592 1,388 1,588 Net income including noncontrolling interest 4,163 3,244 3,520 Less: Net income attributable to noncontrolling interest 78 51 60 Net income $ 4,085 $ 3,193 $3,460 Consolidated Balance Sheets ($ millions) 2010 2009 Assets Current Assets Cash and cash equivalents $ 3,377 $3,040 Marketable securities-current 1,101 744 Accounts receivable-net 3,615 3,250 Inventories Finished goods 1,476 1,255 Work in process 950 815 Raw materials and supplies 729 569 Total inventories 3,155 2,639