Currently. Atlas Tours has $5 80 million in assets. This is a peak six-month period. During the other six months, temporary current assets drop to $450,000, Temporary current assets Permanent current assets Capital assets $1,250,000 1,900,000 2,650,000 Total assets $5,500,000 Short-term rates are 5 percent Long-term rates are 7 percent Annual earnings before interest and taxes are $1,130,000. The tax rate is 38 percent o. If the assets are perfectly hedged throughout the year, what will earnings after taxes be? (Enter answers in whole dollor, not in million.) Earnings after taxes b. If short-term interest rates increase to 7 percent when assets are at their lowest level what will earnings after taxes be? Eoran example of perfectly hedged plans.see Figure 6.8 Earnings after taxes -10 Lear, Inc has $1100,000 in current assets, $470,000 of which are considered permanent current assets. In addition, the firm has $720,000 invested in capital assets. a. Lear wishes to finance all capital assets and half of its permanent current assets with long-term financing costing 10 percent. Short- term financing currently costs 5 percent Lear's earnings before interest and taxes are $320,000 Determine Lear's earnings after taxes under this financing plan. The tax rate is 30 percent. Earnings after taxes b. As an alternative, Lear might wish to finance all capital assets and permanent current assets plus hall of its temporary current assets with long-term financing. The same interest rates apply as in part a. Earnings before interest and taxes will be $320,000. What will be Lear's earnings after taxes? The tax rate is 30 percent Earnings after taxes $ c. Not available in Connect