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

	River Division		Stream Division
Sales revenue	$	1,210,000	$	1,815,000
Cost of goods sold and operating expenses		892,000		1,282,000
Net operating income	$	318,000	$	533,000
Average invested assets	$	1,040,000	$	1,590,000

The companys hurdle rate is 6.76 percent.

Required:

1.

Calculate return on investment (ROI) and residual income for each division for last year. (Do not round your intermediate calculations. Round "ROI" answers to 2 decimal places.)

	River Division			Stream Division
ROI		%		%
Residual Income

+

2.	Recalculate ROI and residual income for each division for each independent situation that follows:

a.

Operating income increases by 8 percent. (Do not round your intermediate calculations. Round "ROI" answers to 2 decimal places.)

	River Division			Stream Division
ROI		%		%
Residual Income

+

b.

Operating income decreases by 9 percent. (Do not round your intermediate calculations. Round "ROI" answers to 2 decimal places.)

	River Division			Stream Division
ROI		%		%
Residual Income

+

c.

The company invests $246,000 in each division, an amount that generates $107,000 additional income per division. (Do not round your intermediate calculations. Round "ROI" answers to 2 decimal places.)

	River Division			Stream Division
ROI		%		%
Residual Income

d.

Coolbrook changes its hurdle rate to 4.76 percent. (Do not round your intermediate calculations. Round "ROI" answers to 2 decimal places.)

	River Division			Stream Division
ROI		%		%
Residual Income