1. Stubs-R-Us is a local event ticket broker. Last year, the company sold 850,000 tickets with an average commission of $6. Because of the general economic climate, Stubs expects ticket volume to decline by 20 percent. In addition, employees at a local insurance company headquarters accounted for 5 percent of Stubs volume. The headquarters relocated to another state and all the employees closed their accounts.

Offsetting these factors is the observation that the average commission per sale is likely to increase by 10 percent because the average ticket prices are expected to be larger in the coming year.

Commission revenues

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Required:

Estimate commission revenues for Stubs-R-Us for the coming year.

2. Friendly Financial has $135 million in consumer loans with an average interest rate of 12 percent. The bank also has $95 million in home equity loans with an average interest rate of 10 percent. Finally, the company owns $25 million in corporate securities with an average rate of 9 percent.

Managers at Friendly Financial estimate that next year its consumer loan portfolio will rise to $305 million and the interest rate will fall to 10 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 $26 million with an average rate of 8 percent.

Required:

Estimate Friendly Financials revenues for the coming year. (Enter your answer in thousands of dollars.)

Interest revenue

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