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Coolbrook Company has the following information available for the past year: Sales revenue Cost of goods sold and operating expenses Net operating income Average invested

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Coolbrook Company has the following information available for the past year: Sales revenue Cost of goods sold and operating expenses Net operating income Average invested assets River Division $ 1,219,000 894,000 $ 325,000 $ 1,080,000 Stream Division $ 1,812,000 1,285,000 $ 527,000 $ 1,430,000 The company's hurdle rate is 6.76 percent. Required: 1. Calculate return on investment (ROI) and residual income for each division for last year. (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.)) River Division Stream Division ROI Residual Income (Loss) 2. Recalculate ROI and residual income for each division for each independent situation that follows: (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.)) a. Operating income increases by 8 percent. River Division Stream Division ROI Residual Income (Loss) b. Operating income decreases by 9 percent. River Division Stream Division ROI Residual Income (Loss) c. The company invests $260,000 in each division, an amount that generates $119,000 additional income per River Division Stream Division ROI Residual Income (Loss) d. Coolbrook changes its hurdle rate to 4.76 percent. River Division Stream Division % ROI Residual Income (Loss)

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