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Using an EXCEL spreadsheet, calculate Residual Income for 2011 , assuming Carmax's average cost of capital is 5%.Logically and neatly, show your work steps, and

Using an EXCEL spreadsheet, calculate Residual Income for 2011, assuming Carmax's average cost of capital is 5%.Logically and neatly, show your work steps, and highlight in yellow the cell containing your answer.Assume that "Net Income" is Operating Income, and that all assets are operating assets.

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Carmax, Inc. Income Statement Years Ended February 28, 2011 and February 20, 2010 [in millions) 2011 2010 Net sales $8.976 $7.470 Cost of goods sold 7.674 6,371 Gross margin $1.302 $1,099 Selling and administrative expenses 905 419 Operating income $ 397 S 280 Interest expense Other income (expenses; net) 220 176 Income before taxes 5 614 453 Income tax expense 233 171 Net income $ 381 $ 282 Carmax, Inc. Balance Sheet February 28, 2011 and February 20, 2010 [in millions) 2011 2010 Assets Current assets Cash and cash equivalents S 18 Accounts receivable (net) 120 682 Merchandise inventory 1.049 843 Other current assets 13 Total current assets $1,410 $ 1,556 Noncurrent assets Property, plant and equipment (net) 920 894 Other assets 4,510 Total assets 106 $6,840 $ 2,556 Liabilities and shareholders' equity Current liabilities Accounts payable and other Mabilities Short-term debt $ 373 S 348 Income taxes payable and deferred taxes 134 123 Total current liabilities Noncurrent liabilities 508 5 477 Long-term debt Other liabilities 3.909 27 Shareholders'equity 131 118 Common stock Retained earnings 934 858 Total Habilities and shareholders equity 1.358 1,076 $6.840 $ 2,556 Saylor URL: http:/www.saylor org/hooks

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