Smith Enterprise Credit Line (W/o Comp)

question 11

Multiple Choice

Smith Enterprise Credit line (w/o comp)
Smith Enterprise has an 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%. Assume that the LIBOR is 6.3%
-What is Smith's effective borrowing rate?

• A) 8.45%
• B) 7.59%
• C) 8.04%
• D) 7.80%

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Definitions:

Reward Timing

The influence of the timing of rewards on learning and behavior, critical in understanding how conditioned responses are developed and maintained.

Secondary Rewards

Rewards that are learned to be valuable through association with primary rewards or through social conditioning.

Sheffield

A city in South Yorkshire, England, known for its history in steel production and green spaces.

Effective Studying

Strategies or methods that enhance learning efficiency, comprehension, and retention of information.