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Coolbrook Company has the following information available for the past year: River Division $ 1,213,000 895,000 $ 318,000 $ 1,060,000 Stream Division $ 1,813,000
Coolbrook Company has the following information available for the past year: River Division $ 1,213,000 895,000 $ 318,000 $ 1,060,000 Stream Division $ 1,813,000 1,281,000 $ 532,000 $ 1,590,000 Sales revenue Cost of goods sold and operating expenses Net operating income Average invested assets The company's hurdle rate is 7.76 percent. 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: a. Operating income increases by 12 percent. b. Operating income decreases by 10 percent. c. The company invests $248,000 in each division, an amount that generates $118,000 additional income per division. d. Coolbrook changes its hurdle rate to 5.76 percent. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Req 2C Req 2D Calculate return on investment (ROI) and residual income for each division for last year. Note: Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.) ROL River Division Stream Division % %
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