Question: Lear Inc. has $ 8 0 0 , 0 0 0 in current assets, $ 3 5 0 , 0 0 0 of which are

Lear Inc. has $800,000 in current assets, $350,000 of which are considered permanent current assets. In addition, the firm has $600,000 invested in capital assets.
As an alternative, Lear might wish to finance all capital assets and permanent current assets plus half of its temporary current assets with long-term financing costing 10 percent. Short-term financing currently costs 5 percent.
What are the long-term financing costs?

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