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Coolbrook Company has the following information available for the past year River Division $ 1,207,000 887,000 $ 320,000 $ 1,120,000 Stream Division $ 1,801,000

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Coolbrook Company has the following information available for the past year River Division $ 1,207,000 887,000 $ 320,000 $ 1,120,000 Stream Division $ 1,801,000 1,299,000 $ 502,000 $ 1,410,000 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: 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 11 percent. b. Operating income decreases by 9 percent. c. The company invests $252.000 in each division, an amount that generates $103,000 additional income per division. d. Coolbrook changes its hurdle rate to 4.51 percent.

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