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 $ 1,206,000 887,088 $ 319,000 $ 1,130,000 Stream Division $ 1,805,000 1,294,000 $ 511, $ 1,560, eee 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. 2. Recalculate ROI and residual income for the division for each independent situation that follows: a. Operating income increases by 9 percent. b. Operating income decreases by 12 percent. c. The company invests $241,000 in each division, an amount that generates $104,000 additional income per division. d. Coolbrook changes its hurdle rate to 4.76 percent. Reg 1 Reg 2A Req 2B Req 2c Reg 2D 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) Reg 1 Reg 2A Reg 28 Req 2c Reg 20 Recalculate ROI and residual income for each division for the independent situation that follows: Operating income increases by 9 percent. (Enter your ROI answers as a percentage rounded to two decimal places, (1.0, 0.1234 should be entered as 12.34%). Loss amounts should be indicated with a minus sign.) River Division Stream Division ROI Residual income (055) Reg 1 Req 2A Req 2B Reg 20 Reg 2D Recalculate ROI and residual income for each division for the independent situation that follows: Operating income decreases by 12 percent. (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.). Loss amounts should be indicated with a minus sign.) River Division Stream Division ROI Residual income (Loss) % % Reg 1 Reg 2A Req 2B Req 2c Reg 2D Recalculate ROI and residual income for each division for the independent situation that follows: The company invests $241,000 in each division, an amount that generates $104,000 additional income per division. (Enter your ROI answers as a percentage rounded to two decimal places, (.e., 0.1234 should be entered as 12.34%.). Round your "Residual Income (Loss)" answer to the nearest whole dollars. Loss amounts should be indicated with a minus sign.) Show less River Division % Stream Division % ROI Residual income (Loss) Reg 1 Reg 2A Reg 2B Req 2c Reg 2D Recalculate ROI and residual income for each division for the independent situation that follows: Coolbrook changes its hurdle rate to 4.76 percent. (Enter your ROI answers as a percentage rounded to two decimal places, (.e., 0.1234 should be entered as 12.34%.). Loss amounts should be indicated with a minus sign.) Stream Division River Division % % ROI Residual Income (Loss)
