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

River Division Stream Division

Sales revenue $ $1,205,000$ $ $1,806,000$

Cost of goods sold and operating expenses $884,0001,300,000$

Net operating income $ $321,000$ $ $506,000$

Average invested assets $ $1,030,000$ $ $1,580,000$

The company$$s hurdle rate is $7\mathrm{.}76$ 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 $9$ percent.

Operating income decreases by $11$ percent.

The company invests $$255,000$ in each division, an amount that generates $$115,000$ additional income per division.

Coolbrook changes its hurdle rate to $5\mathrm{.}76$ percent.