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Lear incorporated has $880,000 in current assets, $390,000 of which are considered permanent current ossets....

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Accounting

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Lear incorporated has $880,000 in current assets, $390,000 of which are considered permanent current ossets. In addition, the firm hos $680,000 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 $280,000. Determine Lear's earnings after taxes under this financing plan. The tax rate is 30 percent. . As an alternative, Lear might wish to finance all fixed assets and permanent current assets plus half of its temporary current assets with long-term financing and the bolance with short-term financing. The same interest rates apply as in part a. Earnings before interest and taxes will be $280,000. What will be Lear's earnings after taxes? The tax rate is 30 percent

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