Nighthawk Steel, a manufacturer of specialized tools, has $4,200,000 in assets. Temporary current assets Permanent current assets Capital assets $1,000,000 2,000,000 1,200,000 Total assets $4,200,000...

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Extracted text: Nighthawk Steel, a manufacturer of specialized tools, has $4,200,000 in assets. Temporary current assets Permanent current assets Capital assets $1,000,000 2,000,000 1,200,000 Total assets $4,200,000 Short-term rates are 4 percent. Long-term rates are 65 percent (Note that long-term rates imply a return to ony equity). Eornings before interest and taxes are $860,000. The tax rate is 25 percent Assume the term structure of interest rotes becomes inverted, with short-term rates going to 9 percent and long-term rates 4.5 percentage points lower than short-term rates If long-term financing is perfectly matched (hedged) with long-term asset needs, and the some is true of short-term financing, what will earnings be after taxes? For an example of perfectly. hedged pians see Figure 6-8 Earning after taxes $ 459,000.00O