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 >
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing
Section: Chapter Questions
Problem 1CE: Forchen, Inc., provided the following information for two of its divisions for last year: Required:...
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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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