Divisional Income Statements and Return on Investment Analysis E.F. Lynch Company is a diversified investment company with three operating divisions organized as investment centers. Condensed data taken from the records of the three divisions for the year ended June 30, 2018, are as follows: Mutual Fund Division Electronic Brokerage Division Investment Banking Division Fee revenue $2,350,000 $2,430,000 $2,360,000 Operating expenses 1,146,000 896,400 1,668,800 Invested assets 8,600,000 7,100,000 4,800,000 The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations. Required: 1. Prepare condensed divisional income statements for the three divisions, assuming that there were no support department allocations. E.F. Lynch Company Divisional Income Statements For the Year Ended June 30, 20Y8 Mutual Electronic Fund Brokerage Division Division Investment Banking Division Fee revenue 2,350,000 2,430,000 2,360,000 1,146,000 896,400 1,668,800 Operating expenses 1,204,000 1,533,600 691,200 Operating income Feedback Check My Work 1. For each division, subtract operating expenses from fee revenue. 2. Using the DuPont formula for return on investment, compute the profit margin, investment turnover, and return on investment for each division. Round your answers to one decimal place. Division Profit Margin Investment Turnover ROI Mutual Fund Division 51.2 % 0.3 X % Electronic Brokerage Division 63.1 % 0.3 X % Investment Banking Division 29.3 % 0.5 X % 3. When faced with limited funds for expansion, management should consider an expansion of the Electronic Brokerage Division first. Feedback Check My Work Partially correct Feedback V Check My Work Partially correct