Question
Segment analysis for a service company Charles Schwab Corporation (SCHW) is one of the more innovative brokerage and financial service companies in the United States.
Segment analysis for a service company
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 |
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: ____ million Assume the fixed assets were sold: ___ million
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