Colter Steel has $4,200,000 in assets.

Temporary current assets ......$1,000,000

Permanent current assets ...... 2,000,000

Fixed assets ........... 1,200,000

Total assets ............ $4,200,000

Short-term rates are 8 percent. Long-term rates are 13 percent. Earnings before interest and taxes are $996,000. The tax rate is 40 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? For a graphical example of perfectly matched plans.