Quicker Bricks Company has $5,200,000 in assets that require financing. The temporary current assets are in...

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Quicker Bricks Company has $5,200,000 in assets that require financing. The temporary current assets are in place for ten months and reduce to zero for two months. Temporary current assets $1,500,000 Permanent current assets 2,000,000 Capital assets 1,700,000 $5,200,000 Total assets Short-term rates are 6 percent. Long-term rates are 12 percent. Earnings before interest and taxes are $998,000. The tax rate is 35 percent. If Quicker Bricks is following a more risky approach with short-term financing sources being used for both temporary current assets and 40% of permanent current assets, what will earnings after taxes be? Quicker Bricks Company has $5,200,000 in assets that require financing. The temporary current assets are in place for ten months and reduce to zero for two months. Temporary current assets $1,500,000 Permanent current assets 2,000,000 Capital assets 1,700,000 $5,200,000 Total assets Short-term rates are 6 percent. Long-term rates are 12 percent. Earnings before interest and taxes are $998,000. The tax rate is 35 percent. If Quicker Bricks is following a more risky approach with short-term financing sources being used for both temporary current assets and 40% of permanent current assets, what will earnings after taxes be?

Answer rating: 100% (QA)

Particulars amount Long term financing Permanent current assets 200000... View the full answer