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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
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 The company's hurdle rate is 6.51 percent. Required: River Division $ 1,204,000 889,000 $315,000 $ 1,150,000 1. Calculate return on investment (ROI) and residual income for each division for last year. Stream Division $ 1,812,000 1,282,000 $530,000 $ 1,580,000 2. Recalculate ROI and residual income for each division for each independent situation that follows: a. Operating income increases by 10 percent. b. Operating income decreases by 10 percent. c. The company invests $253,000 in each division, an amount that generates $118,000 additional income per division. d. Coolbrook changes its hurdle rate to 4.51 percent. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 2C Req 2D Calculate return on investment (ROI) and residual income for each division for last year. Note: 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)
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