Guardian Inc. is trying to develop an asset$-$financing plan. The firm has $$510,000$ in temporary current assets and $$410,000$ in

permanent current assets. Guardian also has $$610,000$ in fixed assets. Assume a tax rate of $40$ percent.

a$.$ Construct two alternative financing plans for Guardian. One of the plans should be conservative, with $90$ percent of assets financed

by long$-$term sources, and the other should be aggressive, with only $56\mathrm{.}25$ percent of assets financed by long$-$term sources. The

current interest rate is $12$ percent on long$-$term funds and $8$ percent on short$-$term financing. Compute the annual interest payments

under each plan.

b$.$ Given that Guardian's earnings before interest and taxes are $$390,000,$ calculate earnings after taxes for each of your alternatives.

c$.$ What would the annual interest and earnings after taxes for the conservative and aggressive strategies be if the short$-$term and long$-$

term interest rates were reversed?