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

	River Division		Stream Division
Sales revenue	$	1,201,000	$	1,810,000
Cost of goods sold and operating expenses		893,000		1,292,000
Net operating income	$	308,000	$	518,000
Average invested assets	$	1,120,000	$	1,500,000

The companys hurdle rate is 7.51 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 11 percent. (Do not round your intermediate calculations. Round "ROI" answers to 2 decimal places.)

	River Divison	Stream Division
ROI	%	%
Risidual Income

b.

Operating income decreases by 12 percent. (Do not round your intermediate calculations. Round "ROI" answers to 2 decimal places.)

	River Divison	Stream Division
ROI	%	%
Risidual Income

c.

The company invests $243,000 in each division, an amount that generates $113,000 additional income per division. (Do not round your intermediate calculations. Round "ROI" answers to 2 decimal places.)

	River Division	Stream Division
ROI	%	%
Risidual Income

d.

Coolbrook changes its hurdle rate to 5.51 percent. (Do not round your intermediate calculations. Round "ROI" answers to 2 decimal places.)

	River Divsion	Stream Division
ROI	%	%
Risidual Income