Nighthawk Steel, a manufacturer of specialized tools, has $$4,600,000$ in assets.

Short$-$term rates are $8$ percent. Long$-$term rates are $13$ percent. $($Note that long$-$term rates imply a return to any equity$).$ Earnings before

interest and taxes are $$980,000.$ The tax rate is $30$ percent.

If long$-$term financing is perfectly matched $($hedged$)$ with long$-$term asset needs, and the same is true of short$-$term financing, what will

earnings after taxes be$?$ For an example of perfectly hedged plans, see Figure $6-8.$

Earnings after taxes

$