PA10-1 Calculating Return on Investment, Residual Income, Determining Effect of Changes in Sales, Expenses, Invested Asset, 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 $ 1,200,000 896,000 $ 304,000 $ 1,130,000 Stream Division $ 1,818,000 1,282,000 $ 536,000 $1,580,000 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. (Enter your ROI answers as a percentage rounded to two decimal places, (.e., 0.1234 should be entered as 12.34%.)) River Division Stream Division ROI Residual income (L.05) 2. Recalculate ROI and residual income for each division for each independent situation that follows: (Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.)) a. Operating income increases by 11 percent. 2. Recalculate ROI and residual income for each division for each independent situation that follows: (Enter your ROI answers a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.)) a. Operating income increases by 11 percent. River Division Stream Division ROI Residual Income (Loss) b. Operating income decreases by 11 percent. River Division Stream Division ROI Residual Income (Loss) c. The company invests $245,000 in each division, an amount that generates $107.000 additional income per division. River Division Stream Division ROI Residual Income (Loss) d. Coolbrook changes its hurdle rate to 5.76 percent. River Division Stream Division ROI Residual Income (Loss) References eBook & Resources Worksheet Difficulty: 3 Hard Learning Objective: 10 income. PA10-1 Calculating Learning Objective: 10-04 Return on Compute and interpret retum Investment, Residual on investment, investment Income, Determining turnover, and profit margin. Effect of Changes in Sales, Expenses, Invested Asset, Hurdle Rate on Each [LO 10-4, 10-5]