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Lear, Inc. has $1,050,000 in current assets, $450,000 of which $700,000 invested in capital assets. are considered permanent current assets, In addition, the firm has

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Lear, Inc. has $1,050,000 in current assets, $450,000 of which $700,000 invested in capital assets. are considered permanent current assets, In addition, the firm has o. Lear wishes to finance all capital assets and hal term financing currently costs 5 percent. Lear's earnings before interest and taxes are $300,000. Determine Lear taxes under this financing plan. The tax rate is 30 percent. If of its permanent current assets with long-term financing costing 10 percent. Short 's earnings after $ Earnings after taxes ces b. As an alternative, Lear might wish to finance all capital assets and permanent current assets plus half of its temporary current assets h long-term financing. The same interest rates apply as in part a. Earnings before interest and taxes will be $300,000. What will be Lear's earnings after taxes? The tax rate is 30 percent. Earnings after taxes $ c. Not available in Connect

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