FIN200 Week 5 Assignment Alternative Financing Plans

FIN200 Week 5 Assignment Alternative Financing Plans -...

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Gregory Mann Finance 200 A. Fixed Asset = $600,000 Permanent Current Asset= $350,000 Non-Permanent current Asset= $800,000 - $350,000 = $450,000 Total Asset financed utilizing long term debt $600,000 + 2 000 , 350 $ = $600,000 + $175,000 = $775,000 Interest accrued on long term debt = $775,000 x 10% = $77,500 Total Asset financed utilizing short term debt $450,000+ 2 000 , 350 $ = $450,000 + $175,000 = $625,000 Interest accrued on short term debt = $625,000 x 5%= $31,250 Lear, Inc. Earning Before Interest and Tax $200,000 Interest on Long term debt - $77,500 Interest on Short term debt - $31,250 Earnings Before Tax $91,250 Less Taxes - $27,375
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Gregory Mann Finance 200 Earnings after tax $63,875 B. Total asset utilizing long term debt = $600,000 + 350,000 + 2 000 , 450 $ = $1,175,000 Interest accrued on long term debt = $1,175,000 x 10%= $117,500 Total asset utilizing short term debt = 2 000 , 450 $ = $225,000 Interest accrued on short term debt = $225,000 x 5% = $11,250 Lear, Inc. Earning before interest and tax
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FIN200 Week 5 Assignment Alternative Financing Plans -...

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