A FI makes a loan commitment of $2.5 million with an up-front fee of 50 basis points

Question:

A FI makes a loan commitment of $2.5 million with an up-front fee of 50 basis points and a back-end fee of 25 basis points on the unused portion of the loan. The takedown on the loan is 50 percent and takedown occurs at the beginning of the year.
a. What total fees does the FI earn when the loan commitment is negotiated?
b. What are the total fees earned by the FI at the end of the year, that is, in terms? Assume the for the FI is 6 percent. Cost Of Capital
Cost of capital refers to the opportunity cost of making a specific investment . Cost of capital (COC) is the rate of return that a firm must earn on its project investments to maintain its market value and attract funds. COC is the required rate of... Future Value
Future value (FV) is the value of a current asset at a future date based on an assumed rate of growth. The future value (FV) is important to investors and financial planners as they use it to estimate how much an investment made today will be worth...