1. 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:

   	Mutual Fund Division		Electronic Brokerage Division		Investment Banking Division
   Fee revenue	$740,000		$750,000		$740,000
   Operating expenses	399,800		354,000		560,000
   Invested assets	2,700,000		2,200,000		1,500,000

   The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations.

   Required:

   Question Content Area

   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 Fund Division	Electronic Brokerage Division	Investment Banking Division
   Fee revenue
   Operating expenses
   Operating income

   Question Content Area

   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
   Electronic Brokerage Division
   Investment Banking Division