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Please please help Direct Computation of Nonoperating Return with Noncontrolling Interest Balance sheets and income statements for Costco Wholesale Corporation follow. Costco Wholesale Corporation Consolidated

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Direct Computation of Nonoperating Return with Noncontrolling Interest Balance sheets and income statements for Costco Wholesale Corporation follow. Costco Wholesale Corporation Consolidated Statements of Earnings For Fiscal Years Ended ($ millions) September 2, 2018 Total revenue $141,576 Operating expenses Merchandise costs 123,152 Selling, general and administrative 13,876 Preopening expenses 68 Operating Income 4,480 Other income (expense) Interest expense 159 Interest income and other, net (121) Income before income taxes 4,442 Provision for income taxes 1,263 Net income including noncontrolling interests 3,179 Net income attributable to noncontrolling interests (45) Net income attributable to Costco $3,134 Costco Wholesale Corporation Consolidated Balance Sheets ($ millions, except par value and share data) September 2, 2018 September 3, 2017 Current assets Cash and cash equivalents $6,055 $4,546 Short-term investments 1,204 1,233 Receivables, net 1,669 1,432 Merchandise inventories 11,040 9,834 Other current assets 321 272 Total current assets 20,289 17,317 Net property and equipment 19,681 18,161 Other assets 860 869 Total assets $40,830 $36,347 $9,608 2,703 961 Current liabilities Accounts payable Accrued salaries and benefits Accrued member rewards Deferred membership fees Other current liabilities Total current liabilities Long-term debt Other liabilities 1,498 $11,237 2,994 1,057 1,624 3,014 19,926 6,487 1,314 2,725 17,495 6,573 1,200 Total liabilities 27,727 25,268 0 0 4 4 5,800 Equity Preferred stock, $0.01 par value: Common stock, $0.01 par value: Additional paid-in-capital Accumulated other comprehensive loss Retained earnings Total Costco stockholders' equity Noncontrolling interests Total equity Total liabilities and equity 6,107 (1,199) 7,887 12,799 304 (1,014) 5,988 10,778 301 13,103 11,079 $36,347 $40,830 In 2018, Costco's return on equity (ROE) is 26.59% and its return on net operating assets (RNOA) is 26.52%. Assume that the combined federal and state statutory tax rate is 22%. a. Compute net nonoperating expense (NNE) and net operating profit after tax (NOPAT). Round to the nearest whole number, if applicable. 2018 NNE $ 30 million 2018 NOPAT $ 3,494 X million b. Compute net nonoperating obligations (NNO) for 2018 and 2017. 2018 NNO $ (772) million 2017 NNO $ 794 million c. Compute financial leverage (FLEV). Round answer to four decimal places. 2018 FLEV 0.0009 d. Compute NNEP and Spread. Round answers to two decimal places (example: 0.12345 = 12.35%). 2018 NNEP 3 X % 2018 Spread 3 X % e. Compute the noncontrolling interest ratio (NCI ratio). Round answer to four decimal places. 2018 NCI Ratio 1.0404 X f. Confirm the relation: ROE = [RNOA + (FLEV * Spread)] NCI ratio. 2018 ROE = 26.59 % = [ 26.52 %+ 0.0009 X 23.83 * %)] X 1.0404 x

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