Pascall Company has the following information available for the past year:

The company’s hurdle rate is 10 percent.
1. Determine Pascall’s return on investment (ROI) and residual income for each division for last year.
2. Recalculate Pascall’s ROI and residual income for each division for each independent situation that follows:

a. Operating income increases by 10 percent.

b. Operating income decreases by 10 percent.

c. The company invests \($400,000\) in each division, an amount that generates \($80,000\) additional income per division.

d. Pascall changes its hurdle rate to 15 percent.

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Segment sales Segment cost of goods sold and operating expenses Segment income Average invested assets Eastern Division $2,200,000 1,700,000 $ 500,000 $3,800,000 Western Division $1,300,000 1,000,000 $ 300,000 $2,500,000