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, 20Y8, are as follows: Investment Mutual Fund Division Electronic Brokerage Division Banking Division Fee revenue $4,140,000 $3,360,000 $4,560,000 Operating expenses 2,980,800 3,091,200 3,739,200 Invested assets 5,175,000 1,120,000 3,800,000 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 service department cost allocations. E.F. Lynch Company Divisional Income Statements For the Year Ended June 30, 20Y8 Mutual Electronic Investment Fund Brokerage Banking Division Division Division Fee revenue 4,140,000 3,360,000 4,560,000 Operating expenses 2,980,800 3,091,200 3,739,200 Income from Operations 1,159,200 268,800 820,800 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 28 % 0.8 22.4 % Electronic Brokerage Division 8 % 3 1.2 X % Investment Banking Division 18 % 24 X 21.6 % 3. When faced with limited funds for expansion, management should consider an expansion of the Electronic Brokerage Division first