Finance

posted by .

Lear, Inc. has $800,000 is current assets, $300,000 of which are considered permanent current assets.
In addition, the firm has $600,000 in fixed assets.

A. Lear wishes to finance all fixed assets and half of its permanent current assets with long-term financing costing 8%.

B. As an alternative, Lear might wish to finance all fixed assets and permanent current assets plus half of its temporary current assets with long-term financing.
The same interest rates apply as in part a. Earnings before interest and taxes will be $250,000.
What will be Lear's earnings after taxes? The tax rate is 40&.

C. What are some of the risks and cost considerations associated with each of these alternative financing strategies?

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Accounting

    Can anyone tell me if one of these is correct?
  2. Accounting

    Lear, Inc. has $800,000 in current assets, $350,000 of which are considered permanent current assets. In addition, the firm has $600,000 invested in fixed assets. a. Lear wishes to finance all fixed assets and half of its permanent …
  3. Accounting-business

    Here is the other part that did not fit on the other post. Lear, Inc. has $800,000 in current assets, $350,000 of which are considered permanent current assets. In addition, the firm has $600,000 invested in fixed assets. a. Lear wishes …
  4. Accounting

    Lear, Inc. has $800,000 in current assets, $350,000 of which are considered permanent current assets. In addition, the firm has $600,000 invested in fixed assets. a. Lear wishes to finance all fixed assets and half of its permanent …
  5. Accounting-business

    Lear, Inc. has $800,000 in current assets, $350,000 of which are considered permanent current assets. In addition, the firm has $600,000 invested in fixed assets. a. Lear wishes to finance all fixed assets and half of its permanent …
  6. accounting

    Can someone please tell me how to set these problems up?
  7. accounting

    14. Lear, Inc. has $800,000 in current assets, $350,000 of which are considered permanent current assets. In addition, the firm has $600,000 invested in fixed assets.
  8. FInance

    Lear, Inc., has $800,000 in current assets, $350,000 of which are considered permanent current assets. In addition, the firm has $600,000 invested in fixed assets. a. Lear wishes to finance all fixed assets and half of its permanent …
  9. Math

    Lear, Inc., has $800,000 in current assets, $350,000 of which are considered permanent current assets. In addition, the firm has $600,000 invested in fixed assets. a. Lear wishes to finance all fixed assets and half of its permanent …
  10. finance 200

    14. Lear, Inc., has $800,000 in current assets, $350,000 of which are considered permanent current assets. In addition, the firm has $600,000 invested in fixed assets. a. Lear wishes to finance all fixed assets and half of its permanent …

More Similar Questions