14. Sherlock Homes, a manufacturer of low-cost mobile housing, has $4,500,000 in assets. Temporary current assets. Permanent current assets. Capital assets Total assets. $1,000,000 1,500,000 2,000,000 $4,500,000 Short-term rates are 8 percent. Long-term rates are 13 percent. (Note that long-term rates imply a return to any equity). Earnings before interest and taxes are $960,000. The tax rate is 40 percent. If long-term financing is perfectly matched (hedged) with long-term asset needs, and the same is true of short-term financing, what will earnings after taxes be? For an example of perfectly hedged plans, see Figure 6-8