Year 1 Transactors Revolvers Churners

Assumptions

Annual spend $18,000 $18,000 $4,000

Percent of balance on revolve 0% 50% 0%

Case Facts

Interchange fee on spend (p. 13 of the case) 1.5% 1.5% 1.5%

Interest rate on revolve balance (midpoint of range

given on p. 18)

20.5% 20.5% 20.5%

Customer Revenues

Annual card fee (p. 1) $450 $450 $450

Interchange fee revenue on spend ? ? ?

Interest revenue on unpaid balance ? ? ?

Acquisition Expenses

Card acquisition expense (p. 2) $350 $350 $350

Bonus point expense (@100k) (1.5% x 100k) (p. 8) $1,500 $1,500 $1,500

Margin ? ? ?