Question: Intro Square Root Beer Inc. has $71 million in current assets and $101 million in fixed assets. Earnings before interest and taxes (EBIT) are $39
Intro Square Root Beer Inc. has $71 million in current assets and $101 million in fixed assets. Earnings before interest and taxes (EBIT) are $39 million for the year. The tax rate is 21%. Short-term financing costs 2% and long-term financing costs 8%. Part 1 0 Attempt 4/10 for 8 pts. What is net income if the firm finances 60% of its assets with long-term debt and the rest with short-term debt (in \$ million)? Part 2 Attempt 1/10 for 10 pts. What is net income if the firm finances only 30% of its assets with long-term debt and the rest with short-term debt (in $ million)
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