Multiple Choice
A firm has a committed line of credit with a maximum of $1.2 million and an interest rate of 12% (EAR) with a certain bank. The commitment fee is 0.6% (EAR) . The firm borrows $500,000 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) $60,000
B) $64,200
C) $76,300
D) $95,000
Correct Answer:
Verified
Correct Answer:
Verified
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