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 The company's hurdle rate is 7.26 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: a. Operating income increases by 11 percent. b. Operating income decreases by 10 percent. c. The company invests $259,000 in each division, an amount that generates $112,000 additional income per division. d. Coolbrook changes its hurdle rate to 5.26 percent. Complete this question by entering your answers in the tabs below. Calculate return on investment (ROI) and residual income for each division for last year. Note: Enter your ROI answers as a percentage rounded to two decimal places, (i .e., 0.1234 should be entered as 12.34% .) 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 The company's hurdle rate is 7.26 percent. Complete this question by entering your answers in the tabs below. Req 1 Required: 1. Calculate return on investment (ROI) and residual income for each division for last year. 2. Recalculate ROI and residual income for each division for each independent situation that follows: a. Operating income increases by 11 percent. b. Operating income decreases by 10 percent. c. The company invests $259,000 in each division, an amount that generates $112.000 additional income per division. d. Coolbrook changes its hurdle rate to 5.26 percent. Reg 2A Req 28 ROI Residual Income (Loss) Req 2C C River Division Stream Division % Req 20 Reg 1 River Division $ 1,203,000 891,000 $ 312,000 $ 1,050,000 Calculate return on investment (ROI) and residual income for each division for last year. Note: Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.) Stream Division $ 1,800,000 1,293,000 $ 507,000 $ 1,490,000 Roq 2A >
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 The company's hurdle rate is 7.26 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: a. Operating income increases by 11 percent. b. Operating income decreases by 10 percent. c. The company invests $259,000 in each division, an amount that generates $112,000 additional income per division. d. Coolbrook changes its hurdle rate to 5.26 percent. Complete this question by entering your answers in the tabs below. Calculate return on investment (ROI) and residual income for each division for last year. Note: Enter your ROI answers as a percentage rounded to two decimal places, (i .e., 0.1234 should be entered as 12.34% .) 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 The company's hurdle rate is 7.26 percent. Complete this question by entering your answers in the tabs below. Req 1 Required: 1. Calculate return on investment (ROI) and residual income for each division for last year. 2. Recalculate ROI and residual income for each division for each independent situation that follows: a. Operating income increases by 11 percent. b. Operating income decreases by 10 percent. c. The company invests $259,000 in each division, an amount that generates $112.000 additional income per division. d. Coolbrook changes its hurdle rate to 5.26 percent. Reg 2A Req 28 ROI Residual Income (Loss) Req 2C C River Division Stream Division % Req 20 Reg 1 River Division $ 1,203,000 891,000 $ 312,000 $ 1,050,000 Calculate return on investment (ROI) and residual income for each division for last year. Note: Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.) Stream Division $ 1,800,000 1,293,000 $ 507,000 $ 1,490,000 Roq 2A >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question

Transcribed Image Text: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 The company's
hurdle rate is 7.26 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: a. Operating
income increases by 11 percent. b. Operating
income decreases by 10 percent. c. The company
invests $259,000 in each division, an amount that
generates $112,000 additional income per
division. d. Coolbrook changes its hurdle rate to
5.26 percent. Complete this question by entering
your answers in the tabs below. Calculate return
on investment (ROI) and residual income for each
division for last year. Note: Enter your ROI answers
as a percentage rounded to two decimal places, (i
.e., 0.1234 should be entered as 12.34% .)
Sales revenue
Cost of goods sold and operating expenses
Net operating income
Average invested assets
Coolbrook Company has the following information available for the past year:
The company's hurdle rate is 7.26 percent.
Req 1
Complete this question by entering your answers in the tabs below.
Reg 2A
Required:
1. Calculate return on investment (ROI) and residual income for each division for last year.
2. Recalculate ROI and residual income for each division for each independent situation that follows:
Operating income increases by 11 percent.
b. Operating income decreases by 10 percent.
c. The company invests $259,000 in each division, an amount that generates $112.000 additional income per
division.
d. Coolbrook changes its hurdle rate to 5.26 percent.
3
Req 2B
ROI
Residual Income (Loss)
Req 2C
C
River Division Stream Division
%
<Rog 1
Req 2D
River Division
$ 1,203,000
891,000
$ 312,000
$ 1,050,000
Calculate return on investment (ROI) and residual income for each division for last year.
Note: Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.)
Stream Division
$ 1,800,000
1,293,000
$ 507,000
$ 1,490,000
Roq 2A >
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Step 1: Define Return on investment
VIEWStep 2: 1. Computing return on investment and residual income
VIEWStep 3: 2a. Computing the ROI when operating income increases by 11%
VIEWStep 4: 2. b)Computing the ROI when operating income increases by 10%
VIEWStep 5: c. Computing the ROI when the company invest and generates additional income
VIEWStep 6: d. Computing ROI and residual income when hurdle rate is 5.26%
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