Coolbrook Company has the following information available for the past year: River Division $1,204,000 881,000 Stream Division $1,806,000 Sales revenue Cost of goods sold and operating expenses 1,299,000 Net operating income $ 323,000 $ 507,000 Average invested assets $1,160,000 $1,590,000 The company's hurdle rate is 6.01 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: a. Operating income increases by 11 percent. b. Operating income decreases by 9 percent. c. The company invests $256,000 in each division, an amount that generates $119,000 additional income per division. d. Coolbrook changes its hurdle rate to 4.01 percent. Req 1 Req 2A Req 2B Req 2C Req 2D 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) Assessment Tool iFrame q 2A Req 2B Req 2C Req 2D Recalculate ROI and residual income for each division for the independent situation that follows: Operating income increases by 11 percent. (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.). Loss amounts should be indicated with a minus sign.) River Division Stream Division ROI % Residual Income (Loss) % Req 1 Req 2A Req 2B Req 2C Req 2D Recalculate ROI and residual income for each division for the independent situation that follows: Operating income decreases by 9 percent. (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.). Loss amounts should be indicated with a minus sign.) River Division ROI Stream Division % % Residual Income (Loss) Req 1 Req 2A Req 2B Req 2C Req 2D Recalculate ROI and residual income for each division for the independent situation that follows: The company invests $256,000 in each division, an amount that generates $119,000 additional income per division. (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.). Round your "Residual Income (Loss)" answer to the nearest whole dollars. Loss amounts should be indicated with a minus sign.) Show less A River Division Stream Division ROI % Residual Income (Loss) % Req 1 Req 2A Req 2B Req 2C Req 2D Recalculate ROI and residual income for each division for the independent situation that follows: Coolbrook changes its hurdle rate to 4.01 percent. (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.). Loss amounts should be indicated with a minus sign.) River Division ROI Stream Division % Residual Income (Loss) %
