Colter Steel has $4,200,000 in assets:

Temporary current assets $ 1,000,000

Permanent current assets 2,000,000

Fixed assets 1,200,000

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Total assets $ 4,200,000

Assume the term structure of interest rates becomes inverted, with short-term rates going to 11 percent and long-term rates 5 percentage points lower than short-term rates. Earnings before interest and taxes are $996,000. The tax rate is 40 percent.

If long-term financing is perfectly matched (synchronized) with long-term asset needs, and the same is true of short-term financing, what will earnings after taxes be?

*confused about the last part of the question? Please explain??