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please help me ear Inc. has $800,000 in current assets, $350,000 of which are considered permanent current assets, In addition, the firm has 5600,000 invested
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ear Inc. has $800,000 in current assets, $350,000 of which are considered permanent current assets, In addition, the firm has 5600,000 invested in capital assets. . Lear wishes to finance all capital assets and half of its permanent current assets with long-term financing costing 10 percent. Shortterm financing currently costs 5 percent. Lear's earnings before interest and taxes are $200,000. Determine Lear's earnings after taxes under this financing plon. The tax rate is 30 percent. Earnings after taxes b. As an alternative, Lear might wish to finance all copltal assets and permanent current assets plus half of its temporary current assets with long-term financing. The same interest rates apply as in part a. Earnings before interest and taxes will be $200,000. What wal be Lear's earnings after taxes? The tax rate is 30 percent. Earnings after taxes Step by Step Solution
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