Liz's Health Food Store has estimated monthly financing requirements for the next six months as follows: January February March $8,000 2,000 3,000 April May June $8,000 9,000 4,000 Short-term financing will be utilized for the next six months. Projected annual interest rates are: January February March 8.00 9.00 12.08 April May June 15.04 12.08 12.08 1970 a. Compute total dollar interest payments for the six months. To convert an annual rate to a monthly rate, divide by 12. (Round the final answer to 2 decimal places. Do not round intermediate calculation.) Total dollar interest payments $ b-1. Compute the total dollar interest payments if long-term financing at 12 percent had been utilized throughout the six months. Assume a long term rate is locked in on an interest-only loan. Total dollar interest payments -2. If long-term financing at 12 percent had been utilized throughout the six months, would the total-dollar interest payments be larger or smaller? 340 OSmaller Larger Phu Lighters has the following assets: Current assets Capital assets $1,750,000 3,000,000 Total assets $4,750,000 During 3 months of the year, current assets drop to $400,000. Its operating profit (EBIT) is expected to be $620,000. Its tax rate is 40 percent Shares are valued at $10. Its capital structure is short-term financing at 3 percent and long-term financing of 50 percent equity. 50 percent debt at 6 percent. (Round the final answers to 2 decimal places.) a. Calculate expected EPS if the firm is perfectly hedged. EPS $ 2.03 b. Calculate expected EPS If Phu is a more aggressive with its capital structure and finances all current assets and 20 percent of its capital assets with short-term loans. EPS $ 2.54 c. Recalculate a and bif short-term rates go to 8 percent while long-term rates remain the same. EPS 1.88 $ Perfectly Hedged Capital structure $ 2.21