Compute ROE and Nonoperating Return with Negative NNO and No Noncontrolling Interest 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 9,355 Costs and expenses Cost of revenue Research and development Marketing and sales General and administrative Total costs and expenses Income from operations Interest and other income (expense), net Income before provision for income taxes Provision for income taxes Net income 10,273 7,846 3,451 30,925 24,913 448 25,361 3,249 $22,112 2018 2017 FACEBOOK INC. Consolidated Balance Sheet At December 31, $ millions Current assets Cash and cash equivalents Marketable securities Accounts receivable, net Prepaid expenses and other current assets Total current assets Property and equipment, net Intangible assets, net $10,019 $8,079 31,095 33,632 7,587 1,779 50,480 24,683 1,294 5,832 1,020 48,563 13,721 1,884 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 abilities 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 Use these financial statements to answer the requirements. . Required For the 2018 fiscal year, Facebook had a return on net operating assets (RNOA) of 57.54%. a. Compute ROE. Note: Round percentage to two decimal places (for example, enter 6.66% for 6.6555%). 26.28 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. Note: Round NNEP percentage to two decimal places (for example, enter 6.66% for 6.6555%). 2018 NNO: $ 0 * million 2017 NNO: $ 0 X million 2018 NNE: $ 0 x million Note: Round NNEP percentage to two decimal places (for example, enter 6.66% for 6.6555%). 2018 NNO: $ 0 x million 2017 NNO: $ 0 X million 2018 NNE: $ 0 x million 2018 NNEP: 0 X % C. Compute FLEV and Spread. Note: For FLEV, round amount to four decimal places (for example, enter 6.7756 for 6.775555). Note: Round Spread percentage to two decimal places (for example, enter 6.66% for 6.6555%). 2018 FLEV: 0 X 2018: Spread: 0 X % d. Show that ROE = RNOA + (FLEV Spread). Note: For FLEV, round amount to four decimal places (for example, enter 6.7756 for 6.775555). Note: For RNOA, Spread, and ROE, round percentages to two decimal places (for example, enter 6.66% for 6.6555%). RNOA = ROE +( FLEV 0% X + x Spread Oxx 0% x ) = 0 % x e. What is the nonoperating return for the year? Note: Round Spread percentage to two decimal places (for example, enter 6.66% for 6.6555%). 0 X % Compute ROE and Nonoperating Return with Negative NNO and No Noncontrolling Interest 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 9,355 Costs and expenses Cost of revenue Research and development Marketing and sales General and administrative Total costs and expenses Income from operations Interest and other income (expense), net Income before provision for income taxes Provision for income taxes Net income 10,273 7,846 3,451 30,925 24,913 448 25,361 3,249 $22,112 2018 2017 FACEBOOK INC. Consolidated Balance Sheet At December 31, $ millions Current assets Cash and cash equivalents Marketable securities Accounts receivable, net Prepaid expenses and other current assets Total current assets Property and equipment, net Intangible assets, net $10,019 $8,079 31,095 33,632 7,587 1,779 50,480 24,683 1,294 5,832 1,020 48,563 13,721 1,884 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 abilities 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 Use these financial statements to answer the requirements. . Required For the 2018 fiscal year, Facebook had a return on net operating assets (RNOA) of 57.54%. a. Compute ROE. Note: Round percentage to two decimal places (for example, enter 6.66% for 6.6555%). 26.28 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. Note: Round NNEP percentage to two decimal places (for example, enter 6.66% for 6.6555%). 2018 NNO: $ 0 * million 2017 NNO: $ 0 X million 2018 NNE: $ 0 x million Note: Round NNEP percentage to two decimal places (for example, enter 6.66% for 6.6555%). 2018 NNO: $ 0 x million 2017 NNO: $ 0 X million 2018 NNE: $ 0 x million 2018 NNEP: 0 X % C. Compute FLEV and Spread. Note: For FLEV, round amount to four decimal places (for example, enter 6.7756 for 6.775555). Note: Round Spread percentage to two decimal places (for example, enter 6.66% for 6.6555%). 2018 FLEV: 0 X 2018: Spread: 0 X % d. Show that ROE = RNOA + (FLEV Spread). Note: For FLEV, round amount to four decimal places (for example, enter 6.7756 for 6.775555). Note: For RNOA, Spread, and ROE, round percentages to two decimal places (for example, enter 6.66% for 6.6555%). RNOA = ROE +( FLEV 0% X + x Spread Oxx 0% x ) = 0 % x e. What is the nonoperating return for the year? Note: Round Spread percentage to two decimal places (for example, enter 6.66% for 6.6555%). 0 X %