Question: Lear Incorporated has $ 1 , 0 5 0 , 0 0 0 in current assets, $ 4 7 5 , 0 0 0 of

Lear Incorporated has $1,050,000 in current assets, $475,000 of which are considered permanent current assets. In addition, the firm has $850,000 invested in fixed assets.
a. Lear wishes to finance all fixed assets and half of its permanent current assets with long-term financing costing 8 percent. The balance will be financed with short-term financing, which currently costs 4 percent. Lear's earnings before interest and taxes are $450,000. Determine Lear's earnings after taxes under this financing plan. The tax rate is 40 percent
\table[[Earnings after taxes,$,133,600
Lear Incorporated has $1,050,000 in current assets, $475,000 of which are

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