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


Answer: B

Business

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The success of the Tom Dennis Ford dealership has been built largely on return customers and word-of-mouth recommendations

The majority of sales are made to customers who previously purchased a vehicle at the dealership or who know someone who had a positive experience of purchasing a vehicle there. The sales force at the Tom Dennis Ford dealership most likely knows that using high-pressure selling is ineffective if the dealership wants to ________. A) achieve short-term gains B) move last year's models C) obey local and federal law D) build long-term customer relationships E) maintain a database of local customers

Business

Currently the cost structure is such that the company cannot achieve its profit objective and must cut costs. If fixed costs cannot be reduced, how much reduction in variable cost per unit will be needed to achieve the desired target? (Round your answer to the nearest cent.)

Kerr Productions is a price-taker. The company produces large spools of electrical wire in a highly competitive market; thus, it uses target pricing. The current market price is $800 per unit. The company has $3,000,000 in average assets, and the desired profit is a return of 7% on assets. Assume all products produced are sold. The company provides the following information:



A) reduction in variable cost per unit by $725.00
B) reduction in variable cost per unit by $75.00
C) reduction in variable cost per unit by $45.00
D) reduction in variable cost per unit by $47.10

Business

Which of the following statements is True?

a. The combined total of labor and overhead is called prime cost. b. The combined total of material and labor is called conversion cost. c. The combined total of material and overhead is called period cost. d. Statements a, b and c are all false.

Business

Real estate sales contract are often made contingent on the buyer obtaining financing.

Answer the following statement true (T) or false (F)

Business