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Sales revenue Cost of goods sold and operating expenses Net operating income Average invested assets River Division $ 1,218,000 Stream Division $ 1,813,000 893,000 1,291,000
Sales revenue Cost of goods sold and operating expenses Net operating income Average invested assets River Division $ 1,218,000 Stream Division $ 1,813,000 893,000 1,291,000 $ 325,000 $ 522,000 $ 1,170,000 $ 1,530,000 The company's hurdle rate is 6.51 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 12 percent. b. Operating Income decreases by 11 percent. c. The company Invests $242,000 in each division, an amount that generates $119.000 additional Income per division. d. Coolbrook changes its hurdle rate to 4.51 percent. Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 28 Req 2C Req 2D 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, (i.e., 0.1234 should be entered as 12.34%.)) River Division ROI Residual Income (Loss) Stream Division Req 2A > Req 1 Req 2A Req 28 Req 2C Req 2D Recalculate ROI and residual income for each division for the independent situation that follows: Operating income increases by 12 percent. (Enter your ROI answers as a percentage rounded to two decimal places. (i.e...1234 should be entered as 12.34%.). Loss amounts should be indicated with a minus sign.) ROI Residual Income (Loss) River Division Stream Division 96 Req 1 Req 2A Req 2B 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, (i.e., 0.1234 should be entered as 12.34%). Loss amounts should be indicated with a minus sign.) RO Residual Income (Loss) River Division Stream Division 96 Req 1 Req 2A Req 28 Req 2C Req 2D Recalculate ROI and residual income for each division for the independent situation that follows: The company invests $242,000 in each division, an amount that generates $119,000 additional income per division. (Enter your ROI answers as a percentage rounded to two decimal places, (i.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.) ROI Residual Income (Loss) River Division Stream Division 96 % Show less A Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 28 Req 2C Req 2D Recalculate ROI and residual income for each division for the independent situation that follows: Coolbrook changes its hurdle rate to 4.51 percent. (Enter your ROI answers as a percentage rounded to two decimal places, (ie., 0.1234 should be entered as 12.34%.). Loss amounts should be indicated with a minus sign.) ROI Residual Income (Loss) River Division Stream Division % %
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