Colter Steel has $4,750,000 in assets. Temporary current assets $ 1,500,000 Permanent current assets 1,525,000...

Colter Steel has $4,750,000 in assets.


Temporary current assets	$	1,500,000
Permanent current assets		1,525,000
Fixed assets		1,725,000
Total assets	$	4,750,000

Short-term rates are 11 percent. Long-term rates are 16 percent. Earnings before interest and taxes are $1,010,000. The tax rate is 30 percent.

If long-term financing is perfectly matched (synchronized) with long-term asset needs, and the same is true of short-term financing, what will earnings after taxes be?

Expert Solution

jeff jeffy answered 2 years ago

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