Refer to the balance sheets and income statement below for Facebook Inc.

FACEBOOK INC.
Consolidated Statement of Income
For Year Ended December 31, $ millions	2018
Revenue	$55,838
Costs and expenses
Cost of revenue	9,355
Research and development	10,273
Marketing and sales	7,846
General and administrative	3,451
Total costs and expenses	30,925
Income from operations	24,913
Interest and other income (expense), net	448
Income before provision for income taxes	25,361
Provision for income taxes	3,249
Net income	$22,112

FACEBOOK INC.
Consolidated Balance Sheet
At December 31, $ millions	2018	2017
Current assets
Cash and cash equivalents	$10,019	$8,079
Marketable securities	31,095	33,632
Accounts receivable, net	7,587	5,832
Prepaid expenses and other current assets	1,779	1,020
Total current assets	50,480	48,563
Property and equipment, net	24,683	13,721
Intangible assets, net	1,294	1,884
Goodwill	18,301	18,221
Other assets	2,576	2,135
Total assets	$97,334	$84,524
Current liabilities
Accounts payable	$820	$380
Partners payable	541	390
Accrued expenses and other current liabilities	5,509	2,892
Deferred revenue and deposits	147	98
Total current liabilities	7,017	3,760
Other liabilities	6,190	6,417
Total liabilities	13,207	10,177
Stockholders' equity
Common stock and additional paid-in capital	42,906	40,584
Accumulated other comprehensive loss	(760)	(227)
Retained earnings	41,981	33,990
Total stockholders' equity	84,127	74,347
Total liabilities and stockholders' equity	$97,334	$84,524
Combined federal and state statutory tax rate	22.00%
RNOA	57.54%

a. Compute ROE.

	Numerator	Denominator	ROE
	Answer	Answer

b. Compute net nonoperating obligations (NNO) for 2018 and 2017, net nonoperating expense (NNE), and the NNE as a percentage of NNO (NNEP), assuming a 22% statutory tax rate.

	Year	NNO
	2018
	2017

	NNE

	Numerator	Denominator	NNEP
	Answer	Answer

c. Compute FLEV and Spread.

	Numerator	Denominator	FLEV
	Answer	Answer

	RNOA (given)	NNEP	Spread
	Answer	Answer

d. Show that ROE = RNOA + (FLEV Spread).

	Ratio	Number
	ROE	Answer
	RNOA (given)	Answer
	FLEV	Answer
	Spread	Answer
	ROE

***ROE may be different due to rounding

e. What is the nonoperating return for the year?

	ROE	RNOA	Nonoperating component of ROE
	Answer	Answer