A.EBIT =$600,000
Less: interest = (1,000,000+375000)*10% +(1,800,000-375,000)*5% =$208,750
Earnings before tax =$391,250
Less: tax =$391250*30% =$117,375
Earnings after taxes =$273,875
B. EBIT =$600,000
Less: interest (1,000,000+750,000+525000)*10% + 525000*5% =$253750
Earnings before tax =$346,250
Less: tax =$103,875
Earning after tax =$242,375
Lear, Inc. has $1,800,000 in current assets, $750,000 of which are considered permanent current assets. In...
Lear, Inc. has $1,400,000 in current assets, $590,000 of which are considered permanent current assets. In addition, the firm has $840,000 invested in capital assets. a. Lear wishes to finance all capital assets and half of its permanent current assets with long-term financing costing 10 percent Short term financing currently costs 5 percent. Lear's earnings before interest and taxes are $440,000. Determine Lear's earnings after taxes under this financing plan. The tax rate is 30 percent. Earnings after taxes b....
Lear Inc. has $1,020,000 in current assets, $460,000 of which are considered permanent current assets. In addition, the firm has $820,000 invested in fixed assets a. Lear wishes to finance all fixed assets and half of its permanent current assets with long-term financing costing 8 percent. The balance will be financed with short-term financing, which currently costs 5 percent. Lear's earnings before interest and taxes are $420,000. Determine Lear's earnings after taxes under this financing plan. The tax rate is...
Lear Inc. has $990,000 in current assets. $445,000 of which are considered permanent current assets. In addition, the firm has $790,000 invested in fixed assets. a. Lear wishes to finance all fixed assets and half of its permanent current assets with long-term financing costing 8 percent. The balance will be financed with short-term financing, which currently costs 6 percent. Lear's earnings before Interest and taxes are $390,000. Determine Lear's earnings after taxes under this financing plan. The tax rate is...
Lear Inc. has $1,000,000 in current assets, $450,000 of which are considered permanent current assets. In addition, the firm has $800,000 invested in fixed assets. a. Lear wishes to finance all fixed assets and half of its permanent current assets with long-term financing costing 9 percent. The balance will be financed with short-term financing, which currently costs 7 percent. Lear’s earnings before interest and taxes are $400,000. Determine Lear’s earnings after taxes under this financing plan. The tax rate...
Lear ine. han $1,030,000 in ourrent asnels, $65,000 ef which ae considered pemanent cument assets In addtion, the frm hsn $830,000 invested in Sxnd assets a Lesr wishes to finsnce al fxed assets and haf of its permanent current assets with long-term financing costing 9 percent. The balance will be finsnced with shotHerm firancing,which curenily costs 6 percent Lear's earnings before iterest and๒es are S430,000. Determne Lear's eerrngs after tex" under ยาย franci ng plan. The tax rate is 40...
Colter Steel has $4,900,000 in assets. Temporary current assets Permanent current assets Fixed assets $ 1,800,000 1,540,000 1,560,000 $ 4,900,000 Total assets Assume the term structure of interest rates becomes inverted, with short-term rates going to 14 percent and long-term rates 4 percentage points lower than short-term rates. Earnings before interest and taxes are $1,040,000. 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,...
A. Colter Steel has $5,350,000 in assets. Temporary current assets $ 2,700,000 Permanent current assets 1,585,000 Fixed assets 1,065,000 Total assets $ 5,350,000 Short-term rates are 11 percent. Long-term rates are 16 percent. Earnings before interest and taxes are $1,130,000. 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? B. Colter Steel has $4,800,000 in assets....
Colter Steel has $5,200,000 in assets. Temporary current assets Permanent current assets Fixed assets Total assets $ 2,400,000 1,570,000 1 , 230, 000 $5,200,000 Short-term rates are 8 percent. Long-term rates are 13 percent. Earnings before interest and taxes are $1,100,000. 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? Earnings after taxes
Colter Steel has $4,600,000 in assets. Temporary current assets $ 1,200,000 Permanent current assets 1,510,000 Fixed assets1,890,000 Total assets$ 4,600,000 Short-term rates are 8 percent. Long-term rates are 13 percent. Earnings before interest and taxes are $980,000. 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? Earnings after taxes_________________ $
Lear, Inc., has $880,000 in current assets, $390,000 of which are considered permanent current assets. In addition, the firm has $680,000 invested in fixedassets.(a)Lear wishes to finance all fixed assets and half of its permanent current assets with long-term financing costing 9 percent. The balance will be financed withshort-term financing, which currently costs 7 percent. Lear’s earnings before interest and taxes are $280,000. Determine Lear’s earnings after taxes under thisfinancing plan. The tax rate is 30 percent. (Omit the "$"...