Nighthawk Steel, a manufacturer of specialized tools, has $5,160,000 in assets. Short-term rates are 7 percent Long-term rates ore 9.5 percent (Note that long-term rates imply a teturn to any equity). Earnings before interest and taxes are $1,070,000. The tax rate is 25 percent Assume the term structure of interest rates becomes inverted, with short-term rates going to 12 percent and long-term rates 6 percentage points lower than short-term rates. If longtem financing is perfectly matched (hedged) with long-term asset needs, and the same is true of short-term financing. what Will earnings be after taxes? For an example of perfectly hedged plans. Bee Flgure 68. Earning ofter taxes