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

River Division Stream Division

Sales revenue $ $1,212,000$ $ $1,813,000$

Cost of goods sold and operating expenses $889,0001,292,000$

Net operating income $ $323,000$ $ $521,000$

Average invested assets $ $1,090,000$ $ $1,440,000$

The company$$s hurdle rate is $7\mathrm{.}01$ 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 $$244,000$ in each division, an amount that generates $$116,000$ additional income per division.

Coolbrook changes its hurdle rate to $5\mathrm{.}01$ percent.