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The Charles Schwab Corporation 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

The Charles Schwab Corporation 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):

 

Individual

Institutional

 

 

Investor

Investor

U.S. Trust

Revenues

$2,742

$803

$832

Income from operations

758

317

103

Depreciation

145

29

33

a. How do you believe Schwab defines the difference between the “Individual Investor” and “Institutional Investor” segments?

b. Provide a specific example of a variable and fixed cost in the “Individual Investor” segment.

c. Estimate the contribution margin for each segment.

d. If Schwab decided to sell its “Institutional Investor” accounts to another company, estimate how much operating income would decline.

Jun 24 2020 View more View Less

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