Coolbrook Company has the following information available for the past year: River Division Stream Division Sales revenue $ 1,216,000 $ 1,804,000 Cost of goods sold and operating expenses 881,000 1,296,000 Net operating income $ 335,000 $ 508,000 Average invested assets $ 1,090,000 $ 1,520,000 The companys hurdle rate is 6.76 percent.

Required: 1. 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)

2. Recalculate ROI and residual income for each division for each independent situation that follows: (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.)) a. Operating income increases by 8 percent.

	River Division		Stream Division
ROI		%		%
Residual Income (Loss)

b. Operating income decreases by 10 percent.

	River Division		Stream Division
ROI		%		%
Residual Income (Loss)

c. The company invests $252,000 in each division, an amount that generates $106,000 additional income per division

	River Division		Stream Division
ROI		%		%
Residual Income (Loss)

d. Coolbrook changes its hurdle rate to 4.76 percent.

	River Division		Stream Division
ROI		%		%
Residual Income (Loss)