Coolbrook Company has the following information available for the past year:

	River Division		Stream Division
Sales revenue	$	1,206,000	$	1,818,000
Cost of goods sold and operating expenses		894,000		1,281,000
Net operating income	$	312,000	$	537,000
Average invested assets	$	1,100,000	$	1,590,000

The companys hurdle rate is 6.01 percent.

Required:

1.

Calculate return on investment (ROI) and residual income for each division for last year. (Do not round your intermediate calculations. Round "ROI" answers to 2 decimal places.)

	River Division	Stream Division
ROI	%	%
Residual Income

2.	Recalculate ROI and residual income for each division for each independent situation that follows:

a.

Operating income increases by 9 percent. (Do not round your intermediate calculations. Round "ROI" answers to 2 decimal places.)

	River Division	Stream Division
ROI	%	%
Residual Income

b.

Operating income decreases by 8 percent. (Do not round your intermediate calculations. Round "ROI" answers to 2 decimal places.)

	River Division	Stream Division
ROI	%	%
Residual Income

c.

The company invests $255,000 in each division, an amount that generates $105,000 additional income per division. (Do not round your intermediate calculations. Round "ROI" answers to 2 decimal places.)

	River Division	Stream Division
ROI	%	%
Residual Income

d.

Coolbrook changes its hurdle rate to 4.01 percent. (Do not round your intermediate calculations. Round "ROI" answers to 2 decimal places.)

	River Division	Stream Division
ROI	%	%
Residual Income