Coolbrook Company has the following information available for the past year:
River Division Stream Division
Sales revenue $ $
Cost of goods sold and operating expenses
Net operating income $ $
Average invested assets $ $
The companys hurdle rate is percent.
Required:
Calculate return on investment ROI and residual income for each division for last year.
Recalculate ROI and residual income for each division for each independent situation that follows:
Operating income increases by percent.
Operating income decreases by percent.
The company invests $ in each division, an amount that generates $ additional income per division.
Coolbrook changes its hurdle rate to percent.
