Question: Eolton Systems Inc. is trying to develop an asset - financing plan. The firm has $ 3 0 0 , 0 0 0 in temporary

Eolton Systems Inc. is trying to develop an asset-financing plan. The firm has $300,000 in temporary current assets and $200,000 in permanent current assets. Eolton also has $400,000 in capital assets. Assume a tax rate of 40 percent. -15 marksa)Construct two alternative financing plans for Eolton. One of the plans should be conservative, with the capital assets, permanent current assets and 20 percent of temporary current assets financed by long-term sources.The other plan should be aggressive, with temporary current assets and 30 percent of permanent current assets financed by short-term sources. The current interest rate is 15 percent on long-term funds and 10 percent on short-term financing. -10 marksBIGb) Given that Eolton's earnings before interest and taxes are $180,000, calculate earnings after taxes for each of your alternatives. -5 marks

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