Summit Inc. is developing a plan to finance its asset base, the details of which are listed below. $ $ Current assets Proportion of current assets which are permanent Capital assets Long-term interest rates Short-term interest rates Corporate tax rate EBIT 180.000 15% 1,000,000 13.0% 8.5% 35% 4,800,000 $ a) Construct a perfectly hedged financing plan. What will Summit's net income be? b) A finance manager has proposed an alternative financial plan. Use the information from part a except for what is listed below. What will net income be under this alternative? Proportion of assets financed with long-term financining Remainder financed with short-term financing 55% c) Would you consider the perfectly hedged plan to be more or less risky than the alternative plan in part b? Question 2 (16 marks)