Question: just need the answer for items on subsection C. thanks Check Collins Systems Inc. is trying to develop an asset-financing plan. The firm has $300,000

just need the answer for items on subsection C. thanks just need the answer for items on subsection C. thanks Check Collins

Check Collins 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. Collins also has $400,000 in capital assets. Assume a tax rate of 40 percent a. Construct two alternative financing plans for Collins. One of the plans should be conservative, with 80 percent of assets financed by long-term sources, and the other should be aggressive, with only 30 percent of assets financed by long-term sources. The current interest rate is 15 percent on long-term funds and 10 percent on short-term financing Conservative Aggressive Total interest charge $ 126000 $103500 b. Given that Collin's earnings before interest and taxes are $180,000, calculate earnings after taxes for each of your alternatives. Conservative Aggressive Earnings after taxes $ 32400 $ 45900 c. What would happen if the short and long-term rates were reversed? Earnings after taxes Conservative Aggressive

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