1. 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	$1,170,000		$1,230,000		$1,180,000
   Operating expenses	628,200		517,200		892,000
   Invested assets	4,300,000		3,600,000		2,400,000

   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 Fund Division	Electronic Brokerage Division	Investment Banking Division
   Fee revenue	$fill in the blank 7737cbff1019072_1	$fill in the blank 7737cbff1019072_2	$fill in the blank 7737cbff1019072_3
   Operating expenses	fill in the blank 7737cbff1019072_4	fill in the blank 7737cbff1019072_5	fill in the blank 7737cbff1019072_6
   Income from operations	$fill in the blank 7737cbff1019072_7	$fill in the blank 7737cbff1019072_8	$fill in the blank 7737cbff1019072_9

   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	fill in the blank 25d36a07102006f_1%	fill in the blank 25d36a07102006f_2	fill in the blank 25d36a07102006f_3%
   Electronic Brokerage Division	fill in the blank 25d36a07102006f_4%	fill in the blank 25d36a07102006f_5	fill in the blank 25d36a07102006f_6%
   Investment Banking Division	fill in the blank 25d36a07102006f_7%	fill in the blank 25d36a07102006f_8	fill in the blank 25d36a07102006f_9%

   3. When faced with limited funds for expansion, management should consider an expansion of the Division first.

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 Fund Division	Electronic Brokerage Division	Investment Banking Division
Fee revenue	$fill in the blank 7737cbff1019072_1	$fill in the blank 7737cbff1019072_2	$fill in the blank 7737cbff1019072_3
Operating expenses	fill in the blank 7737cbff1019072_4	fill in the blank 7737cbff1019072_5	fill in the blank 7737cbff1019072_6
Income from operations	$fill in the blank 7737cbff1019072_7	$fill in the blank 7737cbff1019072_8	$fill in the blank 7737cbff1019072_9

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	fill in the blank 25d36a07102006f_1%	fill in the blank 25d36a07102006f_2	fill in the blank 25d36a07102006f_3%
Electronic Brokerage Division	fill in the blank 25d36a07102006f_4%	fill in the blank 25d36a07102006f_5	fill in the blank 25d36a07102006f_6%
Investment Banking Division	fill in the blank 25d36a07102006f_7%	fill in the blank 25d36a07102006f_8	fill in the blank 25d36a07102006f_9%

3. When faced with limited funds for expansion, management should consider an expansion of the Division first.