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5. (LO6-5) Guardian Inc. is trying to develop an asset financing plan. The firm has $400,000 in temporary current assets and $300,000 in permanent current

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5. (LO6-5) Guardian Inc. is trying to develop an asset financing plan. The firm has $400,000 in temporary current assets and $300,000 in permanent current assets. Guardian also has $500,000 in fixed assets. Assume a tax rate of 40 percent. a. Construet two alternative financing plans for Guardian. One of the plans should be conservative, with 75 percent of assets finaneed by long-term sources, and the other should be aggressive, with only 56.25 pereent of assets financed by long-term sources. The current interest rate is 15 pereent on long-term funds and 10 pereent on short-term financing. b. Given that Guardian's earnings before interest and taxes are $200,000, calculate earnings after taxes for each of your alternatives. c. What would happen if the short-and long-term rates were reversed

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