Smith Enterprise Credit Line (W/o Comp)

question 33

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%
-Refer to Smith Enterprise Credit line (w/o comp) .What is the change in your EBR if you only borrow $2,000,000 instead of $3,250,000?

• A) increases by .44%
• B) decreases by .44%
• C) does not change
• D) increases by .78%

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Definitions:

Fertilizer Effectiveness

The impact of fertilizer on promoting plant growth, measured by the increase in biomass, yield, or health of the plants.

Wilcoxon Rank-sum Test

A nonparametric test used to assess whether there is a significant difference between two independent samples based on median comparison.

Kruskal-Wallis Test

A nonparametric statistical test used to compare three or more groups or samples that do not meet the assumption of normality.

Left-tailed Wilcoxon Rank Sum Test

A nonparametric test used to assess whether one of two groups of independent samples tends to have lower values than the other.