Sherlock Homes, a manufacturer of low cost mobile housing, has $4,650,000 in assets. Temporary current assets Permanent current annet Capital asets $1,300,000 1,515,000 1,835,000 Total ansate $4,650,000 Short-term rates are 9 percent. Long-term rates are 14 percent. (Note that long-term rates Imply a return to any equity). Earnings before Interest and taxes are $990,000. 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