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 The company's hurdle rate is 7.76 percent. River Division $1,214,000 899,000 $ 315,000 $ 1,120,000 a. Operating income increases by 12 percent. b. Operating income decreases by 12 percent. Stream Division $ 1,815,000 1,283,000 $ 532,000 $ 1,580,000 Required: 1. Calculate return on investment (ROI) and residual income for each division for last year. 2. Recalculate ROI and residual income for each division for each independent situation that follows: c. The company invests $247,000 in each division, an amount that generates $106,000 additional income per division. d. Coolbrook changes its hurdle rate to 5.76 percent.

Coolbrook Company has the following information available for the past year: The company's hurdle rate is 776 percent. Required: 1. Calculate retum on investment (ROI) and residual income for each division for last year: 2. Recalculate ROI and residual income for each division for each independent situation that follows: o. Operating income increases by 12 percent b. Operating income decreases by 12 percent. c. The company invests $247,000 in each division, an amount that generates $106,000 addilional income per division d. Coolbrook changes its hurdle rate to 5.76 percent