The Fine Leather Co. has bonds outstanding that mature in nine years, have a 7 percent coupon, and pay interest annually. These bonds have a face value of $1,000 and a current market price of $1,080. What is the company's after-tax cost of debt if their tax rate is 35 percent?

Wisconsin snowmobile corp. is considering a switch to level production. cost efficiencies would occur under level production, and after tax costs would decline by $36,000, but inventory would increase by $300,000. wisconsin snowmobile would have to finance the extra inventory at a cost of 13.5 percent.a. determine the extra cost or savings of switching over to level production. should the company go ahead and switch to level production? b how low would interest rates need to fall before level production would be feasible?