River
Division	Stream Division
Sales revenue	$	1,215,000	$	1,809,000
Cost of goods sold and operating expenses		888,000		1,284,000
Net operating income	$	327,000	$	525,000
Average invested assets	$	1,140,000	$	1,470,000
The companys hurdle rate is 7.26 percent.
Required:
1
Calculate return on investment (ROI) and residual income for each division for last year. (Do not round your intermediate calculations. Round "ROI" answers to 2 decimal places.)
		River Division	Stream Division
	ROI	_________%	_________%
	Residual Income	__________	__________
2
Recalculate ROI and residual income for each division for each independent situation that follows:
a.
Operating income increases by 10 percent. (Do not round your intermediate calculations. Round "ROI" answers to 2 decimal places.)
		River Division	Stream Division
	ROI	_________%	_________%
	Residual Income	__________	__________
b.
Operating income decreases by 9 percent. (Do not round your intermediate calculations. Round "ROI" answers to 2 decimal places.)
		River Division	Stream Division
	ROI	_________%	_________%
	Residual Income	__________	__________
c.
The company invests $258,000 in each division, an amount that generates $109,000 additional income per division. (Do not round your intermediate calculations. Round "ROI" answers to 2 decimal places.)
		River Division	Stream Division
	ROI	_________%	_________%
	Residual Income	__________	__________
d.
Coolbrook changes its hurdle rate to 5.26 percent. (Do not round your intermediate calculations. Round "ROI" answers to 2 decimal places.)
		River Division	Stream Division
	ROI	_________%	_________%
	Residual Income	__________	__________