a$.$Construct two alternative financing plans for the firm.$$ One of the plans should be conservative, with $75$ percent of assets financed by long$-$term sources and the remainder $(25\%)$ financed by short$-$term sources.$$ The $2$nd alternative should be aggressive, with only $56\mathrm{.}25$ percent of assets financed on long$-$term funds and the remainder, $43\mathrm{.}75\%,$ on short$-$term financing.$$

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b$.$ Given that the firm$$s earnings before interest and taxes are $$200,000,$ calculate earnings after taxes for each of your alternatives.

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c$.$ What would happen to the answer if the short$-$ and long$-$term rates were reversed?$$ Recalculate a and b above with reversed interest rates.

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d$.$ What do these results tell you aobut the impact of financing assets?