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Divisional Income Statements and Return on Investment Analysis E.F. Lynch Company...

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Accounting

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 $710,000 $750,000 $690,000
Operating expenses 346,000274,800488,400
Invested assets 2,600,0002,200,0001,400,000
The management of E.F. Lynch Company is evaluating each division as a basis for planning a future expansion of operations.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.
When faced with limited funds for expansion, management should consider an expansion of the
Division first.
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