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Corley Communications performed a customer profitability analysis and obtained the following results for its bottom five customers: Customer Sales Customer Net Profit Customer Profit Margin

Corley Communications performed a customer profitability analysis and obtained the following results for its bottom five customers:
 


Customer

 


Sales

 

Customer
Net Profit

 

Customer
Profit Margin

Albert $525,000 $9,450  1.80%
Brown $1,200,000 $16,800  1.40%
Carter $1,400,000 $5,600  0.40%
Dyson $600,000 ($1,500) (0.25%)
English $460,000 ($4,140) (0.90%)


Chris Corley, vice president for marketing, believes that if these five customers are dropped, the selling expenses required to serve them will be eliminated. Company revenues total $18,000,000; the current average customer profit margin is 7.2%, and net income is $400,000.

a.) Calculate the total customer net profit.
 

Total customer profit margin $

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(b) Calculate average customer profit margin after dropping all five customers. (Round answer to 2 decimal places, e.g. 15.25%.) Average customer profit margin

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