Friendly Financial has $160 million in consumer loans with an average interest rate of 12.5 percent. The
Question:
Friendly Financial has $160 million in consumer loans with an average interest rate of 12.5 percent. The bank also has $96 million in home equity loans with an average interest rate of 8 percent. Finally, the company owns $20 million in corporate securities with an average rate of 5 percent.
Managers at Friendly Financial estimate that next year its consumer loan portfolio will rise to $168 million and the interest rate will fall to 10.5 percent. They also estimate that its home equity loans will fall to $80 million with an average interest rate of 9 percent, and its corporate securities portfolio will increase to $25 million with an average rate of 6 percent.
Required:
Estimate Friendly Financial’s revenues for the coming year. (Enter your answer in thousands of dollars.)
Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher