00 Sprint Wi-Fi 12:09 PM ezto.mheducation.com 5.00 points You did not receive cr
ID: 2463428 • Letter: 0
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00 Sprint Wi-Fi 12:09 PM ezto.mheducation.com 5.00 points You did not receive credt for Coolbrook Co the past year: mpany has the following information available for Division Division 1,209,000 1,819.000 85,000 ,283.000 Sales revenue Cost of goods sold and operating expenses Net operating income Average invested assets 324,000$ 536,000 1,150,000 $1,430,000 The company's hurdle rate is 7.26 percent. Required 1 Calculate return on investment (ROl) and residual income for each division for last year. (Do not round your intermediate calculations. Round "ROI" answers to 2 decimal places.) ROI 28.17 % 37.48 % Residual Income S 240,510 432,182 2 Recalculate ROI and residual income for each division for each independent situation that follows: Operating income increases by 12 percent. (Do not round your intermediate calculations. Round "ROi" answers to 2 decimal places.) ROI 31.55 % 4198% Residual IncomeExplanation / Answer
Answer River Division Stream Division Sales Revenue 1209000 1819000 Cost of good Sold & Administrative Exp. 885000 1283000 Net Operating Income 324000 536000 Average Invested Assets 1150000 1430000 Hurdle rate 7.26% 7.26% Answer 1 ROI 28.17% 37.48% Residual Income 240510 432182 Answer 2 Net Operating Income Increase by 12% 362880 600320 ROI 31.55% 41.98% Residual Income 279390 496502 Answer 3 Net Operating Income decrease by 9% 294840 487760 ROI 25.64% 34.11% Residual Income 211350 383942 Answer 4 Net Operating Income 438000.00 650000.00 Average Invested Assets 1399000.00 1679000.00 Hurdle rate 7.26% 7.26% ROI 31.31% 38.71% Residual Income 336432.60 528104.60 Answer 5 Hurdle rate 5.26% ROI 28.17% 37.48% Residual Income 263510 460782
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