Reference no: EM133230932
Stubs-R-Us is a local event ticket broker. Last year, the company sold 900,000 tickets with an average commission of $5. Because of the general economic climate, Stubs expects ticket volume to decline by 20 percent. In addition, loss of one customer base should cause another 5% decline.
Offsetting these factors is the observation that the average commission of $5 is projected to increase by 10% because the average ticket prices are expected to be larger in the coming year.
Required:
Estimate commission revenues for Stubs-R-Us for the coming year
Emmons Lawn Maintenance (ELM) provides lawn and garden care for residential properties. In the current year, ELM maintains 75 properties and earns an average of $5,000 annually for each property. The owner of ELM is planning for the coming year. New building in the area is expected to increase volume by 20 percent. In addition, the owner estimates that the number of homeowners that will want ELM's service will increase by 10 percent.
ELM plans to increase the price of service by 12.5 percent to cover expected increased wage and equipment costs.
Required
Estimate revenues for Emmons Lawn Maintenance for the coming year.
Bramell Park is an amusement park with an entrance fee that allows unlimited rides. Last year, the company sold 88,000 one-day admission tickets with an average price of $125 and 30,000 three-day admission tickets with an average price of $280. The park management expects one-day admission ticket volume to decrease by 12 percent and three-day admission ticket volume to increase by 4 percent.
At the same time, increased competition is expected to result in one-day ticket prices that are 15 percent lower than the current level and three-day ticket prices that are 10 percent lower than the current price.
Required
Estimate admission revenues for Bramell Park for the coming year.
Gladys Bank & Trust has $360 million in consumer loans with an average interest rate of 7.25 percent. The bank also has $240 million in home equity loans with an average interest rate of 5 percent. Finally, the company owns $60 million in government securities with an average rate of 3 percent.
Managers at Gladys Bank & Trust estimate that next year its consumer loan portfolio will fall to $320 million and the interest rate will increase to 8.75 percent. They also estimate that its home equity loans will increase to $280 million with an average interest rate of 7 percent, and its government securities portfolio will increase to $75 million with an average rate of 6.5 percent.
Required
Estimate the revenues for the coming year for Gladys Bank & Trust.
Ethel Company manufactures and sells desk lamps for hotel and motel rooms. Last year, it sold 120,000 units of its model Y lamp for $45 per unit. The company estimates that this volume represents a 24 percent share of the current market. The market is expected to increase by 8 percent next year. Marketing specialists have determined that as a result of new competition, the company's market share will fall to 20 percent (of this larger market). Due to changes in production costs and competitive models, the new price for the lamps will be $48 per unit. The revised volume estimates are based on the $48 price.
Required
Estimate Ethel Company's sales revenues from model Y lamps for the coming year