Apple Inc. is comparing two different capital structures, an all$-$equity plan $($Plan I$)$ and a levered plan $($Plan II$).$ Under Plan I, Apple would have $178,500$ shares of stock outstanding. Under Plan II$,$ there would be $71,400$ shares of stock outstanding and $$1\mathrm{.}79$ million in debt outstanding. The interest rate on the debt is $10$ percent and there are no taxes. What is the breakeven EBIT?

Question $3$Answer

a$.$

$$350,000\mathrm{.}90$

b$.$

$$333,333\mathrm{.}88$

c$.$

$$290,878\mathrm{.}78$

d$.$

$$341,000\mathrm{.}67$

e$.$

$$298,333\mathrm{.}33$