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need an answer asap Christensen & Assoc. is developing an asset financing plan. Christensen has $500,000 in current assets, of which 15% are permanent, and
need an answer asap
Christensen & Assoc. is developing an asset financing plan. Christensen has $500,000 in current assets, of which 15% are permanent, and $700,000 in capital assets. The current long-term rate is 11%, and the current short-term rate is 8.5%. Christensen's tax rate is 40%. A) Construct two financing planszone conservative, with 80% of assets financed by long-term sources, and the other aggressive, with only 60% of assets financed by long-term sources. B) If Christensen's earnings before interest and taxes are $325,000, calculate net income under each alternative. C) What are some of the risks associated with each plan? D) Which plan would you recommend to Christensen? Why? hart AGStep by Step Solution
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