Coolbrook Company has the following information available for the past year: River Stream Division Division Sales revenue $1,215,000 897,000 $ 318,000 $1,160,000 $1,818,000 1,287,000 $ 531,000 $1,500,000 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 the division for each independent situation that follows: a. Operating income increases by 9 percent. b. Operating income decreases by 9 percent. c. The company invests $259,000 in each division, an amount that generates $105,000 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 Req 2A Req 2B Req 20 Req 2D Calculate return on investment (ROI) and residual income for each division for last year. (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 ROI Residual Income (Loss) Pea 1 Rea 24
Coolbrook Company has the following information available for the past year: River Stream Division Division Sales revenue $1,215,000 897,000 $ 318,000 $1,160,000 $1,818,000 1,287,000 $ 531,000 $1,500,000 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 the division for each independent situation that follows: a. Operating income increases by 9 percent. b. Operating income decreases by 9 percent. c. The company invests $259,000 in each division, an amount that generates $105,000 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 Req 2A Req 2B Req 20 Req 2D Calculate return on investment (ROI) and residual income for each division for last year. (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 ROI Residual Income (Loss) Pea 1 Rea 24
Chapter12: Balanced Scorecard And Other Performance Measures
Section: Chapter Questions
Problem 6EA: During the current year, Sokowski Manufacturing earned income of $350,000 from total sales of...
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Coolbrook Company has the following information available for the past year:
River Division | Stream Division | ||||
Sales revenue | $ | 1,215,000 | $ | 1,818,000 | |
Cost of goods sold and operating expenses | 897,000 | 1,287,000 | |||
Net operating income | $ | 318,000 | $ | 531,000 | |
Average invested assets | $ | 1,160,000 | $ | 1,500,000 | |
The company’s hurdle rate is 7.26 percent.
Required:
1. Calculate
2. Recalculate ROI and residual income for the division for each independent situation that follows:
a. Operating income increases by 9 percent.
b. Operating income decreases by 9 percent.
c. The company invests $259,000 in each division, an amount that generates $105,000 additional income per division.
d. Coolbrook changes its hurdle rate to 5.26 percent.
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