Homework Answers
Interest Paid over entire year = 5,000,000 x 6% = 300,000
Commitment Fee = 0.25% x 5,000,000 = 12,500
Loan Available = 5,000,000 x (1 - 10%) = 4,500,000
Effective Cost = (300,000 + 12,500) / 4,500,000 = 6.94%
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