Under a revolving credit agreement, the _____ is lower than the interest on the borrowed funds, but it can amount to a fairly hefty charge if the firm has a large unused balance.
A) commitment fee
B) brokerage fee
C) origination fee
D) utilization fee

Question

Quizplus · Accepted Answer

A commitment fee is charged on the unused portion of a revolving credit facility, making it lower than the interest on borrowed funds but potentially significant if the unused balance is large.

Under a Revolving Credit Agreement, the _____ Is Lower Than