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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 6.01 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: Complete this question by entering your answers in the tabs below. River Division $ 1,209,000 898,000 $ 311,000 $ 1,150,000 a. Operating income increases by 9 percent. b. Operating income decreases by 10 percent. c. The company invests $250,000 in each division, an amount that generates $114,000 additional income per division. d. Coolbrook changes its hurdle rate to 4.01 percent. 70 Stream Division $ 1,811,000 1,294,000 $ 517,000 $ 1,560,000 7

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 6.01 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: Complete this question by entering your answers in the tabs below. River Division $ 1,209,000 898,000 $ 311,000 $ 1,150,000 a. Operating income increases by 9 percent. b. Operating income decreases by 10 percent. c. The company invests $250,000 in each division, an amount that generates $114,000 additional income per division. d. Coolbrook changes its hurdle rate to 4.01 percent. 70 Stream Division $ 1,811,000 1,294,000 $ 517,000 $ 1,560,000 7

Managerial Accounting: The Cornerstone of Business Decision-Making
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter15: Financial Statement Analysis
Section: Chapter Questions
Problem 40E: Cuneo Companys income statements for the last 3 years are as follows: Refer to the information for...
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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 6.01 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: Complete this question by entering your answers in the tabs below. a. Operating income increases by 9 percent. b. Operating income decreases by 10 percent. c. The company invests $250,000 in each division, an amount that generates $114,000 additional income per division. d. Coolbrook changes its hurdle rate to 4.01 percent. Req 1 Req 2A ROI Residual Income (Loss) Req 2B River Division $ Recalculate ROI and residual income for each division for the independent situation that follows: Operating income increases by 9 percent. Note: Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.). Loss amounts should be indicated with a minus sign. 2.43 % Req 2C 41,125 River Division $ 1,209,000 898,000 $ 311,000 $ 1,150,000 Req 2D Stream Division $ 1,811,000 1,294,000 $ 517,000 $ 1,560,000 Stream Division 2.98 % $ 47,226 Show less A
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 6.01 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: Complete this question by entering your answers in the tabs below. a. Operating income increases by 9 percent. b. Operating income decreases by 10 percent. c. The company invests $250,000 in each division, an amount that generates $114,000 additional income per division. d. Coolbrook changes its hurdle rate to 4.01 percent. Req 1 Req 2A ROI Residual Income (Loss) Req 2B River Division $ Recalculate ROI and residual income for each division for the independent situation that follows: Operating income increases by 9 percent. Note: Enter your ROI answers as a percentage rounded to two decimal places, (i.e., 0.1234 should be entered as 12.34%.). Loss amounts should be indicated with a minus sign. 2.43 % Req 2C 41,125 River Division $ 1,209,000 898,000 $ 311,000 $ 1,150,000 Req 2D Stream Division $ 1,811,000 1,294,000 $ 517,000 $ 1,560,000 Stream Division 2.98 % $ 47,226 Show less A
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