Charles Schwab Corporation (SCHW) is one of the more innovative brokerage and financial service companies in the United States. The company recently provided information about its major business segments as follows (in millions): Investor Services Advisor Services Revenues $5,411 $2,067 Operating income 2,031 962 Depreciation 180 54 Investor Services (in millions) Advisor Services (in millions) Estimated contribution margin 2211 1016 d. If Schwab decided to sell its “Advisor Services” accounts to another company, estimate how much operating income would decline under the following assumptions. Assume the fixed costs that serve Advisor investors would not be sold but would be used by the other sector: ____________ Assume the fixed assets were “sold”: ________________
Charles Schwab Corporation (SCHW) is one of the more innovative brokerage and financial service companies in the United States. The company recently provided information about its major business segments as follows (in millions): Investor Services Advisor Services Revenues $5,411 $2,067 Operating income 2,031 962 Depreciation 180 54 Investor Services (in millions) Advisor Services (in millions) Estimated contribution margin 2211 1016 d. If Schwab decided to sell its “Advisor Services” accounts to another company, estimate how much operating income would decline under the following assumptions. Assume the fixed costs that serve Advisor investors would not be sold but would be used by the other sector: ____________ Assume the fixed assets were “sold”: ________________
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Charles Schwab Corporation (SCHW) is one of the more innovative brokerage and financial service companies in the United States. The company recently provided information about its major business segments as follows (in millions):
| Investor Services |
Advisor Services |
|||
| Revenues | $5,411 | $2,067 | ||
| Operating income | 2,031 | 962 | ||
| 180 | 54 |
| Investor Services (in millions) |
Advisor Services (in millions) |
|
| Estimated contribution margin | 2211 | 1016 |
d. If Schwab decided to sell its “Advisor Services” accounts to another company, estimate how much operating income would decline under the following assumptions.
Assume the fixed costs that serve Advisor investors would not be sold but would be used by the other sector: ____________
Assume the fixed assets were “sold”: ________________
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