Calculating Fees on a Loan Commitment During the Last Year

question 97

Multiple Choice

Calculating Fees on a Loan Commitment During the last year you have had a loan commitment from your bank to fund working capital for your business.The total line available was $2,500,000,of which you took down $1,000,000.It is now the end of the loan commitment period and your bank is asking you to pay the back-end fees.You have misplaced the paperwork that listed the terms of the commitment,but you know you paid total fees (this does not include any interest paid to borrow the $1,000,000) of $15,000 on this loan commitment.You remember that the back-end fee was 30 basis points.Calculate the front-end fee on this loan commitment.

• A)30 basis points
• B)42 basis points
• C)60 basis points
• D)70 basis points

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Definitions:

Employment Experience

The accumulation of knowledge, skills, and attitudes acquired by individuals through participating in the workforce.

External Supply of Labour

Refers to the availability of potential employees outside the organization, which can be influenced by factors such as demographic changes and education levels.

Retraining Employees

The process of teaching existing employees new skills or updating their current skills to meet the changing demands of their job roles or the company.

Soft Cost

Expenses that are not directly related to physical construction or labor costs, often including design, legal fees, and permits.