I copied the answers from someone else and it is correct however I dont understand how.

Please explain as much as possible, step by step with formulas and why!

Thank you

Green Foods currently has $400,000 of equity and is planning an $160,000 expansion to meet increasing demand for its product, The company currently earns $60,000 in net income, and the expansion will yield $30,000 in additional income before any interest expense. The company has three options: (1) do not expand, (2) expand and issue $160,000 in debt that requires payments of 12% annual interest, or (3) expand and raise $160,000 from equity financing. For each option, compute (a) net income and (b) return on equity (Net Income Equity). Ignore any income tax effects. (Round "Return on equity" to 1 decimal place.)