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Coolbrook Company has the following information available for the past year: Sales revenue River Division $ 1,219,000 894,000 $ 325,000 $ 1,040,000 Stream Division
Coolbrook Company has the following information available for the past year: Sales revenue River Division $ 1,219,000 894,000 $ 325,000 $ 1,040,000 Stream Division $ 1,819,000 1,282,000 $ 537,000 $ 1,590,000 Cost of goods sold and operating expenses Net operating income Average invested assets The company's hurdle rate is 6.26 percent. Required: 1. Calculate return on investment (ROI) and residual income for each division for last year. 2. Recalculate ROI and residual income for each division for each independent situation that follows: a. Operating income increases by 8 percent. b. Operating income decreases by 9 percent. c. The company invests $248,000 in each division, an amount that generates $116,000 additional income per division. d. Coolbrook changes its hurdle rate to 4.26 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%.) ROI Residual Income (Loss) River Division Stream Division % % < Req 1 Req 2A > Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 2C Req 2D Recalculate ROI and residual income for each division for the independent situation that follows: Operating income increases by 8 percent. Note: 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. ROI Residual Income (Loss) River Division Stream Division % % < Req 1 Req 2B > Show less Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 2C Req 2D Recalculate ROI and residual income for each division for the independent situation that follows: Operating income decrease by 9 percent. Note: 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. ROI Residual Income (Loss) River Division Stream Division % % < Req 2A Req 2C < Show less Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 2C Req 2D Recalculate ROI and residual income for each division for the independent situation that follows: The company invests $248,000 in each division, an amount that generates $116,000 additional income per division. Note: Enter your ROI answers as a percentage rounded to two decimal places, (i.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. ROI Residual Income (Loss) River Division Stream Division % % < Req 2B Req 2D > Show less Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 2C Req 2D Recalculate ROI and residual income for each division for the independent situation that follows: Coolbrook changes its hurd rate to 4.26 percent. Note: 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. ROI Residual Income (Loss) River Division Stream Division % % < Req 2C Req 2D > Show less
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