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		888,000			1,297,000
Net operating income	$	313,000		$	513,000
Average invested assets	$	1,090,000		$	1,550,000

The companys hurdle rate is 6.51 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 9 percent.

	River Division	Stream Division
ROI	%	%
Residual Income (Loss)

b. Operating income decreases by 10 percent.

	River Division	Stream Division
ROI	%	%
Residual Income (Loss)

c. The company invests $246,000 in each division, an amount that generates $101,000 additional income per division.

	River Division	Stream Division
ROI	%	%
Residual Income (Loss)

d. Coolbrook changes its hurdle rate to 4.51 percent.

	River Division	Stream Division
ROI	%	%
Residual Income (Loss)