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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 7.26 percent. Required: River Division $ 1,201,000 887,000 $ 314,000 $ 1,040,000 Stream Division $ 1,803,000 1,281,000 $ 522,000 $ 1,550,000 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 9 percent. b. Operating income decreases by 8 percent. c. The company invests $251,000 in each division, an amount that generates $115,000 additional income per division. d. Coolbrook changes its hurdle rate to 5.26 percent. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 28 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 ROI 30.19 $ Residual Income (Loss) 238,496 Stream Division % 33.67 956,450
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