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This is the format of answers for all of the requirements :) Coolbrook Company has the following information available for the past year: Sales revenue
This is the format of answers for all of the requirements :)
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 $1,216,000 896,000 $ 320,000 $ 1,090,000 Stream Division $ 1,817,000 1,283,000 $ 534,000 $ 1,590,000 The company's hurdle rate is 6.26 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 9 percent. b. Operating income decreases by 9 percent. c. The company invests $251,000 in each division, an amount that generates $101.000 additional income per division. d. Coolbrook changes its hurdle rate to 4.26 percent. Req 1 Req 2A Req 2B Req 2C Reg 2D Calculate return on investment (ROI) and residual income for each division for percentage rounded to two decimal places, (i.e., 0.1234 should be entered as River Division 29.36% $(251,875) Stream Division % ROI Residual Income (Loss)Step by Step Solution
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