Sherlock Homes, a manufacturer of low cost mobile housing, has 54750,000 in assets. Temporary current aneta Permanent current assets capital assets $1,500,000 1.525,000 1,725,000 Total annet $4,750,000 pod Short-term rates are 11 percent. Long-term rates are 16 percent. (Note that long-term rates imply a return to any equity) Earnings before interest and taxes are $1,010,000. The tax rate is 30 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