The University Credit Union has provided you with data regarding representative clients from three broad market segments.

The UCU informs you that it earns 6% per year on deposits and pays out 4% for savings accounts. Checking accounts do not earn interest, unless the balance is over $1,000, in which case they earn 3%. The bank also has conducted a detailed ABC study that reveals the following:

Required:
a. Compute the monthly profitability of the three representative accounts.
b. What actions do you recommend that UCU initiate to improve itsprofitability?

Studeni Homeowners Retivees $1,100 800 Checking account balance Teller transactions per month ATM transactions per month Number of checks Number of telephone enquiries Number of bills via Bill Pay Number of overdrafts Average savings balance Credit card balance Safe deposit box (% of customers) Auto loan (% of customers) Electronic statement (% of customers) Monthly household income Household net worth 0.5 8 2 0.5 20 0 0 0.25 $100 $5,000 $450 SO 80% 90% 5% 90% 40% 2% $1,000 55,000 $5,500 $75,000 $3,000 45,000 Transaction Teller transactions per month ATM transactions Number of checks Number of telephone enquiries Number of overdrafts Credit card balance Safe deposit box Revenue/Cost $2 S0.25 $0.03 per check $0.50 Bank charges $10, but incurs little cost Earn interest at 24% per annum Average box loses $10 per year. This is seen Bill Pay Auto loarn as an "essential service. $0.02 per ll paid by bank Average loan balance is $5,000, and annual profit margin is 10% of balance $1.50 Cost per statement