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Unformatted text preview: Perm. Current Assets= $ 350,000.00 of Temp. current assets= $ 400,000.00 Current Earnings = $ 200,000.00 1,350,000 * .10= $ 135,000.00 (Long Term Financing @ 10%) Earnings Before Taxes (EBT) = $65,000.00 Earnings After Taxes (EAT) = $ 19,500.00 C: Some of the risks and cost considerations associated with each of these alternative financing strategies is that higher finance and interest rates can reduce profits. Additionally, not all businesses can afford the luxury or are in the position of utilizing long term financing as a source of funds....
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- Spring '09