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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 invested
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 River Division $ 1,213,000 894,000 319,000 $ 1,160,000 Stream Division $ 1,801,000 1,287,000 $ 514,000 $ 1,460,000 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 the 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 $252,000 in each division, an amount that generates $108,000 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 Reg 2A Req 2B Req 2c Reg 2D Calculate return on investment (ROI) and residual income for each division for last year. (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.)) River Division % Stream Division % ROI Residual Income (Loss)
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