Sherlock Homes, a manufacturer of low cost mobile housing, has $4,800,000 in assets Temporary current assets Permanent current assets Capital assets $1,6ee,eee 1,530,000 1,670, eee Total assets $4,800,000 Short-term rates are 12 percent. Long-term rates are 17 percent. (Note that long-term rates imply a return to any equity). Earnings before interest and taxes are $1,020,000. The tax rate is 40 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 $