Sales, Expenses, Invested Assets, Hurdle Rate on Each [LO 10-4, 10-5] 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: 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 8 percent. b. Operating income decreases by 8 percent. c. The company invests $241,000 in each division, an amount that generates $118,000 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. Req 1 River Division $ 1,206,000 891,000 $315,000 $1,160,000 ROI Residual Income (Loss) Req 2A Req 28 Req 20 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%.) Req 20 River Division Stream Division % Stream Division $ 1,808,000 1,296,000 $ 512,000 $ 1,540,000
Sales, Expenses, Invested Assets, Hurdle Rate on Each [LO 10-4, 10-5] 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: 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 8 percent. b. Operating income decreases by 8 percent. c. The company invests $241,000 in each division, an amount that generates $118,000 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. Req 1 River Division $ 1,206,000 891,000 $315,000 $1,160,000 ROI Residual Income (Loss) Req 2A Req 28 Req 20 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%.) Req 20 River Division Stream Division % Stream Division $ 1,808,000 1,296,000 $ 512,000 $ 1,540,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
A9
![Sales, Expenses, Invested Assets, Hurdle Rate on Each [LO 10-4, 10-5]
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.
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 8 percent.
b. Operating income decreases by 8 percent.
c. The company invests $241,000 in each division, an amount that generates $118,000 additional income per division.
d. Coolbrook changes its hurdle rate to 5.26 percent.
River Division
$ 1,206,000
891,000
$ 315,000
$ 1,160,000
ROI
Residual Income (Loss)
Stream Division
$ 1,808,000
1,296,000
$ 512,000
$ 1,540,000
Req 1
Req 2A
Req 28
Req 2C
Req 2D
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%.)
River Division) Stream Division)
%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fa701aa54-d7b2-4d41-8332-beb594a14554%2F6a94dd6c-f3f8-41bf-82ed-9ee83cb790ea%2F0nw15sj_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Sales, Expenses, Invested Assets, Hurdle Rate on Each [LO 10-4, 10-5]
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.
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 8 percent.
b. Operating income decreases by 8 percent.
c. The company invests $241,000 in each division, an amount that generates $118,000 additional income per division.
d. Coolbrook changes its hurdle rate to 5.26 percent.
River Division
$ 1,206,000
891,000
$ 315,000
$ 1,160,000
ROI
Residual Income (Loss)
Stream Division
$ 1,808,000
1,296,000
$ 512,000
$ 1,540,000
Req 1
Req 2A
Req 28
Req 2C
Req 2D
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%.)
River Division) Stream Division)
%
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