Multiple Choice
A firm has a committed line of credit with a maximum of $2.5 million and an interest rate of 9% (EAR) with a certain bank. The commitment fee is 0.65% (EAR) . The firm borrows $2 million at the start of the year, and then repays it at the end of the year. What is the total cost of the loan?
A) $180,000
B) $183,250
C) $193,000
D) $212,500
Correct Answer:
Verified
Correct Answer:
Verified
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