Respuesta :
Answer and Explanation:
a. The estimation of the contribution margin for each segment is shown below:
                           (in millions)
Particulars       Investor Advisor       Services Services Â
Income from
operations        $1,681                  $1,660
Add:
Depreciation      $171                   $154
Contribution
Margin           $1,852                  $1,814
2. Now the estimation of decline in operating income is
                          (in millions)
Particulars     Combined services      Institutional Services Â
Revenues      $9,368                 $4,771
Less:
Variable cost   $5,702                 $2,919
          ($2,919 + $2,783)
Contribution
margin        $3,666                 $1,852
Less:
Fixed cost     -$325                   -$171
Net income     $3,341                  $1,681
So according to the above calculations, the net operating income is declined by
= $3,341 - $1,681
= $1,660 million
The variable cost is come from
= Service revenues - income from operations - depreciation expense