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

River Division Stream Division

Sales revenue $ $1,212,000$ $ $1,816,000$

Cost of goods sold and operating expenses $895,0001,283,000$

Net operating income $ $317,000$ $ $533,000$

Average invested assets $ $1,140,000$ $ $1,560,000$

The company$$s hurdle rate is $6\mathrm{.}51$ percent.

Required:

Calculate return on investment $($ROI$)$ and residual income for each division for last year.

Recalculate ROI and residual income for each division for each independent situation that follows:

Operating income increases by $12$ percent.

Operating income decreases by $9$ percent.

The company invests $$252,000$ in each division, an amount that generates $$105,000$ additional income per division.

Coolbrook changes its hurdle rate to $4\mathrm{.}51$ percent.