Levels Tought:
Elementary,Middle School,High School,College,University,PHD
Teaching Since: | May 2017 |
Last Sign in: | 307 Weeks Ago, 5 Days Ago |
Questions Answered: | 66690 |
Tutorials Posted: | 66688 |
MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
Guardian Inc. is trying to develop an asset-financing plan. The firm has $340.000 in temporary current assets and $240,000 in permanent current assets. Guardian also has S440,000 in fixed assets. Assume a tax rate of 25 percent. a. Construct two alternative financing plans for Guardian. One of the plans should be conservative, with 90 percent of assets financed by long-term sources, and the other should be aggressive, with only 56.25 percent of assets financed by long-term sources. The current interest rate is 14 percent on long-term funds and 8 percent on short-term financing. Compute the annual interest payments under each plan. Annual Interest Conservative Aggressive b. Given that Guardian's earnings before interest and taxes are $220,000, calculate earnings after taxes for each of your alternatives. Earning After Taxes Conservative Aggressive
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