Bandolier Bicycles Has a Committed Line of Credit with a Maximum

question 65

Multiple Choice

Bandolier Bicycles has a committed line of credit with a maximum of $450,000 and interest rate of 4% (EAR) .The loan has a commitment fee of 0.3% (EAR) .If the firm borrows $375,000 at the start of the year and repays it at the end of the year,what is the total cost of the loan?

• A)$15,225
• B)$15,000
• C)$18,225
• D)$18,000
• E)$16,125

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Definitions:

Reaction

A process in which substances, called reactants, transform into different substances known as products.

Organic Chemistry

The study of carbon-containing compounds, their properties, synthesis, and reactions.

Major Organic Product

During chemical interactions with organic compounds, it's the principal product yielded in the largest quantity.

Reaction

The act of substances merging to form new ones, each with its own differing features.