PA$10-1($Algo$)$ Calculating Return on Investment, Residual Income, Determining Effect of Changes in

Sales, Expenses, Invested Assets, Hurdle Rate on Each $[$LO $10-4,10-5]$

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

The company's hurdle rate is $7\mathrm{.}51$ percent.

Required:

Calculate return on investment $($ROI$)$ and residual income for each division for last year.

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 $9$ percent.

c$.$ The company invests $$256,000$ in each division, an amount that generates $$102,000$ additional income per division.

d$.$ Coolbrook changes its hurdle rate to $5\mathrm{.}51$ percent.

Complete this question by entering your answers in the tabs below.

Recalculate ROI and residual income for each division for the independent situation that follows: Coolbrook changes its hurdle

rate to $5\mathrm{.}51$ percent.

Note: Enter your ROI answers as a percentage rounded to two decimal places, $($i$.$e$.,0\mathrm{.}1234$ should be entered as $12\mathrm{.}34\%.).$

Loss amounts should be indicated with a minus sign.