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.
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...
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Fundamentals of Cost Accounting
ISBN: 978-1259969478
6th edition
Authors: William N. Lanen, Shannon Anderson, Michael W Maher