Colter Steel has $5,250,000 in assets.

Short-term rates are 9 percent. Long-term rates are 14 percent. Earnings before interest and taxes are $1,110,000. 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.

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Temporary current assets. Permanent current assets. Fixed assets. Total assets...... $2,500,000 1,575,000 1,175,000 $5,250,000