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

	River Division		Stream Division
Sales revenue	$	1,206,000	$	1,820,000
Cost of goods sold and operating expenses		896,000		1,295,000
Net operating income	$	310,000	$	525,000
Average invested assets	$	1,000,000	$	1,550,000

The companys hurdle rate is 6.51 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 1 decimal place.)

	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 10 percent. (Do not round your intermediate calculations. Round "ROI" answers to 1 decimal place.)

	River Division	Stream Division
ROI	__________%	____________%
Residual Income	$__________	$____________

c.

The company invests $249,000 in each division, an amount that generates $104,000 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 4.51 percent. (Do not round your intermediate calculations. Round "ROI" answers to 1 decimal places.)

	River Division	Stream Division
ROI	__________%	____________%
Residual Income	$__________	$____________