In the previous problem, assume the term structure of interest rates becomes inverted, with short-term rates going to 12 percent and long-term rates 4 percentage points lower than short-term rates.
If all other factors in the problem do not change, what will earnings be after taxes? Why has the company benefited?

Previous Problem

Temporary current assets ..... . .. .. .. . ... . ... .$1,000,000
Permanent current assets ...............................1,500,000
Capital assets .................. ...............................2,000,000
Total assets ....................................................$4,500,000