Find the source of funds for decision making

Reference no: EM1316024

Determination of source of funds for decision making.

McKinsee Inc. is developing a plan to finance its asset base. The firm has $5,000,000 in current assets, of which 20% are permanent, and $12,000,000 in fixed assets. Long-term rates are currently 9.5%, while short-term rates are at 7%. McKinsee's tax rate is 30%.

If interest rates were expected to increase, which plan would you recommend? Why?

Reference no: EM1316024

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