Paloma Accounting is developing an asset financing plan. Paloma has $1,200,000 in current assets, of which 20% are permanent, and $2,300,000 in capital assets. The current long-term rate is 7.5%, and the current short-term rate is 3.5%. Paloma's tax rate is 40%. A) Construct two financing plans-one conservative, with 75% of assets financed by long-term sources, while the other is an aggressive plan, with only 30% of assets financed by long-term sources. B) Paloma's earnings before interest and taxes are $600,000, calculate net income under each alternative. C) Explain why long-term financing is more expensive but less risky than short-term financing. Excel Template