Samantha Karp Alternative fin plan

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

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
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
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Background image of page 2
This is the end of the preview. Sign up to access the rest of the document.

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....
View Full Document

Page1 / 2

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

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online