Student Finance (StuFi) is a start-up that aims to use the power of social communities to transform the student loan market. It connects participants through a dedicated lending pool, enabling current students to borrow from a school's alumni community. StuFi's rev- enue model is to take an upfront fee of 40 basis points (0.40%) eachfrom the alumni investor and the student borrower for every loan originated on its platform. StuFi hopes to go public in the near future and is keen to ensure that its financial results are in line with that ambition. StuFi's budgeted and actual results for the third quarter of 2017 are presented below. Page Layout в Insert Formulas Data Review View Home Static Budget Actual Results 1. New loans originated Average amount of loan Variable costs per loan: Professional labor Credit verification 8,200 10,250 $145,000 $162,000 4 $360 (8 hrs at $45 per hour) $475 (9.5 hrs at $50 per hour) $100 $100 Federal documentation fees $125 $120 Courier services 9 Administrative costs (fixed) 10 Technology costs (fixed) $50 $800,000 $1,300,000 $54 $945,000 $1,.415,000

Student Finance (StuFi) is a start-up that aims to use the power of social communities to transform the student loan market. It connects participants through a dedicated lending pool, enabling current students to borrow from a school's alumni community. StuFi's rev- enue model is to take an upfront fee of 40 basis points (0.40%) eachfrom the alumni investor and the student borrower for every loan originated on its platform. StuFi hopes to go public in the near future and is keen to ensure that its financial results are in line with that ambition. StuFi's budgeted and actual results for the third quarter of 2017 are presented below. Page Layout в Insert Formulas Data Review View Home Static Budget Actual Results 1. New loans originated Average amount of loan Variable costs per loan: Professional labor Credit verification 8,200 10,250 $145,000 $162,000 4 $360 (8 hrs at $45 per hour) $475 (9.5 hrs at $50 per hour) $100 $100 Federal documentation fees $125 $120 Courier services 9 Administrative costs (fixed) 10 Technology costs (fixed) $50 $800,000 $1,300,000 $54 $945,000 $1,.415,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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