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

	River Division			Stream Division
Sales revenue	$	1,213,000		$	1,805,000
Cost of goods sold and operating expenses		880,000			1,297,000
Net operating income	$	333,000		$	508,000
Average invested assets	$	1,150,000		$	1,560,000

The companys hurdle rate is 7.01 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 10 percent.

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

b. Operating income decreases by 11 percent.

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

c. The company invests $254,000 in each division, an amount that generates $114,000 additional income per division.

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

d. Coolbrook changes its hurdle rate to 5.01 percent.

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