Carla Vista Cosmetics management is setting up a line of credit at the company’s bank for $5 million for up to two years. The interest rate is 6.30 percent and the loan agreement calls for an annual fee of 63 basis points on any unused balance for the year. If the firm borrows $2.8 million on the day the loan agreement is signed, what is the effective rate for the line of credit?

Magic realm, inc., has developed a new fantasy board game. the company sold 15,000 games last year at a selling price of $20 per game. fixed expenses associated with the game total $182,000 per year, and variable expenses are $6 per game. production of the game is entrusted to a printing contractor. variable expenses consist mostly of payments to this contractor.required: 1-a. prepare a contribution format income statement for the game last year.1-b. compute the degree of operating leverage.2. management is confident that the company can sell 58,880 games next year (an increase of 12,880 games, or 28%, over last year). given this assumption: a. what is the expected percentage increase in net operating income for next year? b. what is the expected amount of net operating income for next year? (do not prepare an income statement; use the degree of operating leverage to compute your answer.)