Question: Guardian Inc. is trying to develop an asset-financing plan. The firm has S470,000 in temporary current assets and $370,000 in permanent current assets. Guardian also

 Guardian Inc. is trying to develop an asset-financing plan. The firm

has S470,000 in temporary current assets and $370,000 in permanent current assets.

Guardian Inc. is trying to develop an asset-financing plan. The firm has S470,000 in temporary current assets and $370,000 in permanent current assets. Guardian also has S570,000 in fixed assets. Assume a tax rate of 30 percent. a. Construct two alternative financing plans for Guardian. One of the plans should be conservative, with 90 percent ofassets financed by long-term sources, and the other should be aggressive, with only 56.25 percent of assets financed by long-term sources. The current interest rate is 16 percent on long-term funds and 9 percent on short-term financing. Compute the annual interest payments under each plan. Annual Interest Conservative Aggressive b. Given that Guardian's earnings before interest and taxes are S350,000, calculate earnings after taxes for each of your alternatives. Earning After Taxes Conservative Aggressive

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