Question: Problem 3 See pages 176-177 and Practice Problem 2 with Solution, Page 183) Medical Equipment of Tampa Inc. trying to develop an asset-financing plan. The

Problem 3 See pages 176-177 and Practice Problem 2 with Solution, Page 183) Medical Equipment of Tampa Inc. trying to develop an asset-financing plan. The firm has $1,500,000 in temporary current assets and $1,200,000 in permanent current assets. The company also has $1,800,000 in fixed assets. Part A Construct two alternative financing plans for Medical of Tampa Inc. One of the plans should b conservative, with 75 percent of assets financed by long-term sources and the rest financed by short-term sources. The other plan should be aggressive, with only 25 percent of assets finance by long-term sources and the remaining assets financed by short-term sources. The current interest rate is 8 percent on long-term funds and 3 percent on short-term financing. Compute the annual interest payments under each plan. (Show your work) Part B Given that Medical Equipment of Tampa Inc.'s earnings before interest and taxes are $10,000,000, calculate earnings after taxes for each of your alternatives. Assume a tax rate of 20 percent. Show your work
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