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Samantha Karp Alternative fin plan

Samantha Karp Alternative fin plan - 11,250 long term...

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Samantha Karp Alternative Financing Plan FIN 200 Lear Inc. a. Current Assets 800,000 Permanent Current Assets 350,000 Temporary Current Assets 450000 Short term interest expenses Temporary current assets 450,000 50% permanent current assets 175,000 Total Short term financing 625,000 Interest on Short term financing 31,250 Long Term interest Expenses Fixed assets 600,000 50% permanent current assets 175,000 Total long term financing 775,000 Ineterst on long term financing 77,500 Total Interest cost 108,750 EBIT 200,000 less interest 108,750 EBT 91250 less taxes 30% 27,375 Earning after taxes 63875 b. Short term interest expenses 50% temporary current assets 225,000 total short term financing 225,000 interest on short term financing
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Unformatted text preview: 11,250 long term expenses fixed assets 600,000 permanent current assets 350,000 50% temporary current assets 225,000 Total Long term financing 1,175,000 Interest on long term financing 117,500 total interest cost 128,750 EBIT 200,000 less Interest 128,750 EBT 71250 less taxes 30% 21,375 Earning after taxes 49875 c. The profit in plan B is less than that of plan A, thus making plan A the reccomeded plan when wanting a higher profit. Plan B does offer a less risy plan however. To finance short term there is more of a chance for rates to increase which could put the company into some trouble....
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Samantha Karp Alternative fin plan - 11,250 long term...

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