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value 2.00 points PA10-1 Calculating Return on Investment, Residual Income, Determining Effect of Changes in Sales, Expenses, Invested Asset, Hurdle Rate on Each [LO 10-4,

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value 2.00 points 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 Stream Sales revenue Cost of goods sold and operating expenses Net operating income Average invested assets River Division Division $1,210,000 S ,807,000 $ 326,000 S 510,000 $ 1,110,000 1,510,000 884,0001297-000- The company's hurdle rate is 7.51 percent. Required 1. Calculate return on investment (ROI) and residual income for each division for last year. (Enter your ROl answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.)) Division ROI Residual Income (Loss) 2. Recalculate Rol 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 10 percent. ROI Residual Income (Loss) b. Operating income decreases by 12 percent. ROI Residual Income (Loss) c. The company invests $243,000 In each division, an amount that generates $113,000 additional income per division. Division ROI Residual Income (Loss) d. Coolbrook changes its hurdle rate to 5.51 percent. River Division Stream Division ROI Residual Income (Loss)

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