PA10-1 (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: Sales revenue Cost of goods sold and operating expenses Net operating income Average invested assets River Division $ 1,205,000 891,800 $ 314,000 $ 1,040,000 Stream Division $1,813,000 1,297,000 $ 516,000 $1,520,000 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 8 percent. b. Operating income decreases by 11 percent. c. The company invests $245,000 in each division, an amount that generates $115,000 additional income per division d. Coolbrook changes its hurdle rate to 4.01 percent. Complete this question by entering your answers in the tabs below. Rea 1 Rea 2A Rea 2B Rea 2c Rea 2D 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 8 percent. b. Operating income decreases by 11 percent. c. The company invests $245,000 in each division, an amount that generates $115,000 additional income per division d. Coolbrook changes its hurdle rate to 4.01 percent. Complete this question by entering your answers in the tabs below. Reg 2A Reg 1 Reg 28 Reg 20 Reg 2c 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, (l.e., 0.1234 should be entered as 12.34% ) Stream Division River Division % ROI Residual Income (Loss) Req 2A > 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 8 percent. b. Operating income decreases by 11 percent. c. The company invests $245,000 in each division, an amount that generates $115,000 additional income per division d. Coolbrook changes its hurdle rate to 4.01 percent. Complete this question by entering your answers in the tabs below. Req 1 Reg 2A Reg 2B Req 2c Req 2D Recalculate ROI and residual income for each division for the independent situation that follows: Operating income increases by 8 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) Reg 1 Req 2B > 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 8 percent. b. Operating income decreases by 11 percent. c. The company invests $245,000 in each division, an amount that generates $115.000 additional income per division d. Coolbrook changes its hurdle rate to 4.01 percent. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 20 Req 2C Req 2D Recalculate ROI and residual income for each division for the independent situation that follows: Operating income decreases by 11 percent. (Enter your ROI answers as a percentage rounded to two decimal places, (1.0, 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) 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 8 percent. b. Operating income decreases by 11 percent. C. The company invests $245,000 in each division, an amount that generates $115,000 additional income per division d. Coolbrook changes its hurdle rate to 4.01 percent. Complete this question by entering your answers in the tabs below. 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 $245,000 in each division, an amount that generates $115,000 additional income per division (Enter your ROI answers as a percentage rounded to two decimal places, (1.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 River Division Stream Division ROI Residual Income (Loss) 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 8 percent. b. Operating income decreases by 11 percent. C. The company invests $245,000 in each division, an amount that generates $115,000 additional income per division d. Coolbrook changes its hurdle rate to 4.01 percent. Complete this question by entering your answers in the tabs below. Req1 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 Stream Division ROI Residual Income (Loss)
