The Student Homework Done!, is a global & favorite student homework/assignment/project/thesis outsourcing entrepreneur startup, that is seeking to increase its working capital by $ 75 million. Student Home Done! Entrepreneurship has entered into a $100 million revolving credit agreement with Student Microfinancing Bank at Shagirdhabad.
As per the agreement between Student Microfinancing Bank, and SBP & HEC. it will only charge 5.5% over the SBP stipulated KIBOR rate, currently at 11% as interest, and a humble 12% compensating fee. Further, there is a nominal 6.5% percent commitment fee, while on average the Student Homework Done! Only utilized 85% of its credit limit.

Required:
Calculate the overall cost of this revolving credit agreement, and the effective discount interest rate.

Answer rating: 100% (QA)

130 Revolving Credit Agreement 131 132 Require to Increase Work... View the full answer