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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

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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 assets River Division $ 1,215,000 898,000 $ 317,000 $ 1,120,000 Stream Division 1,807,000 1,291,000 516,000 1,550,000 $ $ The company's hurdle rate is 7.51 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 10 percent. River Division Stream Division ROI Residual Income (Loss) b. Operating income decreases by 11 percent. River Division Stream Division ROI Residual Income (Loss) c. The company invests $244,000 in each division, an amount that generates $109,000 additional income per division. River Division Stream Division ROI Residual Income (Loss) d. Coolbrook changes its hurdle rate to 5.51 percent. River Division Stream Division ROI Residual Income (Loss)

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