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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

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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 $1,213,000 897,000 $ 316,000 $1,160,000 Stream Division $1,810,000 1,282,000 $ 528,000 $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: erating income increases by 12 percent. b. Operating income decreases by 9 percent. c. The company invests $242,000 in each division, an amount that generates $104,000 additional income per division d. Coolbrook changes its hurdle rate to 4.26 percent. a

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