Aussell Ltd instalis and servicen heating and ventilation systerns for commercial premises. The business's most recent staternent of financial position and income statemant are as follows: The business wishes to invest in more machinery and equipment to enable it to cope with an upsurge in demand for its services. An additional operating profit of \&120,000 a year is expected if an investment of 600,000 is made in plant and machinery. The directors are considering an offer from venture capitalists to finance the expansion programme. The finance will be made available immediately through either: an issue of E1 ordinary shares at a premium on nominal value of 83 a share; or II an issue of 600,00010 per cent loan notes at nominal value. The directors wish to maintain the same dividend payout ratio in future years as in past years whichever method of finance is chosen. Required: (a) For each of the financing schemes: (i) prepare a projected income statement for next year; (ii) calculate the projected earnings per share for next year: (iii) calculate the projected level of gearing as at the end of next year. (b) Briefly assess both of the financing schemes under consideration from the viewpoint of the existing shareholders