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9 Guardian Incorporated is trying to develop an asset-financing plan. The firm has $370,000 in temporary current assets and $270,000 in permanent current assets. Guardian also has $470,000 in fixed assets. Assume a tax rate of 30 percent Check my w a. Construct two alternative financing plans for Guardian. One of the plans should be conservative, with 70 percent of assets financed by long-term sources, and the other should be aggressive, with only 56.25 percent of assets financed by long-term sources. The current interest rate is 12 percent on long-term funds and 8 percent on short-term financing. Compute the annual interest payments under each plan. -Book Annual Interest Hint Print Conservative Aggressive $ $ 97,440 83,363 erences b. Given that Guardian's earnings before interest and taxes are $250,000, calculate earnings after taxes for each of your alternatives. Conservative Earning After Taxes Annressive Prev 9 of 14

9 Guardian Incorporated is trying to develop an asset-financing plan. The firm has $370,000 in temporary current assets and $270,000 in permanent current assets. Guardian also has $470,000 in fixed assets. Assume a tax rate of 30 percent Check my w a. Construct two alternative financing plans for Guardian. One of the plans should be conservative, with 70 percent of assets financed by long-term sources, and the other should be aggressive, with only 56.25 percent of assets financed by long-term sources. The current interest rate is 12 percent on long-term funds and 8 percent on short-term financing. Compute the annual interest payments under each plan. -Book Annual Interest Hint Print Conservative Aggressive $ $ 97,440 83,363 erences b. Given that Guardian's earnings before interest and taxes are $250,000, calculate earnings after taxes for each of your alternatives. Conservative Earning After Taxes Annressive Prev 9 of 14

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
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9 Guardian Incorporated is trying to develop an asset-financing plan. The firm has $370,000 in temporary current assets and $270,000 in permanent current assets. Guardian also has $470,000 in fixed assets. Assume a tax rate of 30 percent Check my w a. Construct two alternative financing plans for Guardian. One of the plans should be conservative, with 70 percent of assets financed by long-term sources, and the other should be aggressive, with only 56.25 percent of assets financed by long-term sources. The current interest rate is 12 percent on long-term funds and 8 percent on short-term financing. Compute the annual interest payments under each plan. -Book Annual Interest Hint Print Conservative Aggressive $ $ 97,440 83,363 erences b. Given that Guardian's earnings before interest and taxes are $250,000, calculate earnings after taxes for each of your alternatives. Conservative Earning After Taxes Annressive Prev 9 of 14
Transcribed Image Text:9 Guardian Incorporated is trying to develop an asset-financing plan. The firm has $370,000 in temporary current assets and $270,000 in permanent current assets. Guardian also has $470,000 in fixed assets. Assume a tax rate of 30 percent Check my w a. Construct two alternative financing plans for Guardian. One of the plans should be conservative, with 70 percent of assets financed by long-term sources, and the other should be aggressive, with only 56.25 percent of assets financed by long-term sources. The current interest rate is 12 percent on long-term funds and 8 percent on short-term financing. Compute the annual interest payments under each plan. -Book Annual Interest Hint Print Conservative Aggressive $ $ 97,440 83,363 erences b. Given that Guardian's earnings before interest and taxes are $250,000, calculate earnings after taxes for each of your alternatives. Conservative Earning After Taxes Annressive Prev 9 of 14
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