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Solve this financial management question- Nighthawk Steel, a manufacturer of specialized tools, has $4,650,000 in assets. Short-term rates are 9 percent. Long-term rates are 14

Solve this financial management question-

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Nighthawk Steel, a manufacturer of specialized tools, has $4,650,000 in assets. 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? Eor an example of perfectly hedged plans. see Figure 6-8

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