Calculate the Total Fees a Firm Would Have to Pay

question 43

Multiple Choice

Calculate the total fees a firm would have to pay when its bank offers the firm the following loan commitment: A loan commitment of $5,000,000 with an up-front fee of 50 basis points and a back-end fee of 20 basis points. The take-down on the loan is 80 percent.

• A) $10,000
• B) $25,000
• C) $27,000
• D) $33,000

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Definitions:

Journalists

Professionals who gather, write, and distribute news and other current information to the public.

Mental Set

The tendency to adopt a certain framework, strategy, or procedure based on immediate experience or context.

Unwarranted Assumptions

Beliefs or premises accepted without sufficient evidence or rational basis, often leading to flawed reasoning or misunderstandings.

Problem Representation

The mental formulation or framing of a problem, including its components and structure, which influences the approach to problem-solving.