Sherlock Homes, a manufacturer of low cost mobile housing, has $4,550,000 in assets. Temporary current assets Permanent current assets Capital assets $1,100,000 1,585,000 1,945, eee Total assets $4,550, eee Short-term rates are 7 percent. Long-term rates are 12 percent. (Note that long-term rates Imply a return to any equity). Earnings before Interest and taxes are $970,000. The tax rate is 20 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 $