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

	River Division	Stream Division
Sales REvenue	$ 1,212,000	$ 1,818,000
Cost of goods sold and operating expenses	$893,000	$ 1,286,000
Net operating income	$ 319,000	$ 532,000
Average Invested Assets	$ 1,100,000	$ 1,550,000

The companys hurdle rate is 7.51 percent.

Required:

1. Calculate return on investment (ROI) and residual income for each division for last year.
2. Recalculate ROI and residual income for each division for each independent situation that follows:
   1. Operating income increases by 8 percent.
   2. Operating income decreases by 10 percent.
   3. The company invests $248,000 in each division, an amount that generates $113,000 additional income per division.
   4. Coolbrook changes its hurdle rate to 5.51 percent