1 2 201 KICH un 5 LD 7 CO S CHO FUN THAN (23) Foundation, Inc., is comparing two different capital structures: an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 145,000 shares of stock outstanding. Under Plan II, there would be 125,000 shares of stock outstanding and $716,000 in debt outstanding. The interest rate on the debt is 8 percent, and there are no taxes. a. If EBIT is $300,000, which plan will result in the higher EPS? b. If EBIT is $600,000, which plan will result in the higher EPS? c. What is the break-even EBIT? LONE Input Area: 12 EBIT 13 EBIT Plan 1: Shares outstanding Plan II: Shares outstanding ebt outstanding Interest rate 145 000 125.000 $715.000 15 (Use cells A6 to B13 from the given information to complete this question. $300 000

Foundation, Inc., is comparing two different capital structures: an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, the company would have 145,000 shares of stock outstanding. Under Plan II, there would be 125,000 shares of stock outstanding and $716,000 in debt outstanding. The interest rate on the debt is 8 percent, and there are no taxes. a. If EBIT is $300,000, which plan will result in the higher EPS? b. If EBIT is $600,000, which plan will result in the higher EPS? c. What is the break-even EBIT? Input Areo: (Use cells A6 to B13 from the Biven information to complete this question.) 15 (Use cells A6 to B13 from the given information to complete this question.) Output Areo: \begin{tabular}{|l|l|l|} \hline Plan I & Net income & EPS \\ Plan II & & \\ Plan I & & \\ Plan II & & \\ Breakeven EBIT & & \\ \hline \end{tabular}