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Thompson Inc. has a $10M revolving credit agreement with its bank. It pays interest on borrowing at 2% over prime and a % commitment fee
Thompson Inc. has a $10M revolving credit agreement with its bank. It pays interest on borrowing at 2% over prime and a % commitment fee on available but unused funds. Last month Thompson had borrowings of $5M for the first half of the month and $10M for the second half. Calculate its interest charges for the month. The banks prime rate is 6%.
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