Scott Equipment Organization is investigating variouscombinations of short- and long-term debt in financing assets.Assume the organization has decided to employ $30 million incurrent assets and $35 million in fixed assets in its operationsnext year provided the level of current assets anticipated salesand EBIT for next year are $60 million and $6 millionrespectively. The organizations income tax rate is 40%.Stockholders equity will be used to finance $40 million of assetswith the remainder financed by short- and long-term debt. Theorganization is considering implementing one of the policies in thediagram.