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What are some of the risks and cost considerations associated with

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Get an answer to this Business homework question!;Get your custom answer from our expert tutors to this homework question;Please help with Alternative Financing Plans assignment;Lear, Inc has $800,000 in current assets, $350,000 of which are considered pernament assets. In addition, the firm has $600,000 invvested in fixed assets.;a. Lear wishes to finance all fixed assets and half of its permanent current asseets with long-term financing? costing 10%. Short-term financing current costs 5%. Lear's earnings before interest and taxes are $200,000. Determine Lear's earnings after taxes under this financing plan. The tax rate is 30%.;b. As an alternative, Lear might wish to finance all fixed assets and permanent current assets plus hallf of its temporary current assets with long-term financing. The same interest rates apply as in part a. Earnings before interest and taxes willl be $200,000. What will be Lear's earnings after taxes? The tax rate is 30%.;c. What are some of the risks and cost considerations associated with each of these alternative financing strategies?

 

Paper#25354 | Written in 18-Jul-2015

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