Smith Enterprise Credit Line

question 104

Multiple Choice

Smith Enterprise Credit Line
Smith Enterprise has a one year credit line of $5,000,000 with Second Bank. On average Smith uses $3,250,000 of the credit line. Second Bank charges a .45% commitment fee on the unused portion of the line and the interest rate is set at LIBOR +1.5%. The bank also requires a 5% compensating balance.
-What is the most that Smith can effectively borrow against the line without having to deposit additional funds with the bank?

• A) $5,000,000
• B) $4,255,374
• C) $4,586,408
• D) $4,761,905

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Definitions:

OTD

OTD stands for "On-Time Delivery," a key performance indicator measuring the success rate of delivering services or goods within the agreed timeframe.

XIO

Represents an "Examine if Open" instruction in ladder logic programming, used to check if a specified condition, such as a switch being open, is met.

NC Limit Switch

A normally closed limit switch designed to maintain contact until it is activated or triggered by the movement of a machine part, then interrupting the circuit.

NO Limit Switch

An electromechanical device that uses a normally open (NO) configuration to detect the presence or absence of an object when the object interacts with the actuator.