Mountainside Medical Goods in embarking on a massive expansion. Assume plans call for opening 20 new stores during the next two years. Each store is scheduled to be 30% larger than the company's existing locations, offering more terms of Inventory and with more elaborate displays, Management estimates that company operations will provide $1.0 million of the cash needed for expansion, Mountainside Medical must raise the remaining $7.5 million from outsiders. (Click the icon to view Information on raising the additional funds.) Read the requirements Requirement 1. Evaluate the effect the two financing alternatives will have on Mountainside's net income and earnings per share two years from now. Begin by selecting the Inbeis needed to analyze the effect of the sternatives on net income and to show earnings per share after the expansion. Next, enter the amounts to show the effect of the borrowing allemative, then enter the amounts to show the effect of the shares of stock alternative. (For amounts with a $0 balance, make sure to enter in the appropriate column. Round the EPS calculation to two decimal places. Enter amounts in dollars instead of millions) Alternative 1 Alternative 2 Requirements Borrow $7.5 million Issue 100,000 shares at 5% of stock 1. Evaluate the effect the two financing alternatives will have on Mountainside's net incom and earnings per share two years from now Less 2. Complete the memo to Mountainside's management discussing the advantages and disadvantages of borrowing and of issuing common stock to raise the needed cash Which method of raising the funds would you recommend? Print Dono Requirement 2. Complete the memo to Mountainside's management discussing the advantages and disadvantages of borrowing and of issuing common stock to the needed cash. Which method of raising funds would you recommend? To: Management of Mountainside Medical Goods Subject: Advantages and disadvantages of borrowing versus issuing stock to raise cash for expansion Choose from any list or enter any number in the input fields and then continue to the next question | Earnings per share after expansion: Income tax expense Interest expense Projected income before interest and income tax Projected income before tax Projected net income Choose from any list or enter any number in the inpl Mourcinio Medico Goods Subject: Advantages and disadvantages of borrowing versus issuing stock to raise cash for expansion The advantages and disadvantages of borrowing to raise cash for expansion are as follows: (If an input field is not used in the table, leave the field emply, do not select a label) Advantages Disadvantages The advantages and disadvantages of issuing stock to raise cash for axpansion are as follows: (If an input field is not used in the table, love the field empty do not select a label) Advantages Disadvantages The method of raising funds that I would recommend depends upon the goal of the company in relation to Pris plan If the company is looking to select an expansion plan that results in a higher earnings per share I would recommend means of raising cash I would recommend to raise cash for expansion. If the company is looking for a "safe" Choose from any stor enter any number in the input fields and then continue to the next question i for e Dilution of the ownership interests of existing stockholders. Increases the financial risk of the company. It avoids the creation of a liability and its related payments. It does not change the present ownership of the business. Results in a higher earnings per share of common stock. Results in a lower earnings per share of common stock. The method of raising funds that I would recommend depends upon the If the company is looking to select an expansion plan that results in a hig means of raising cash I would recommend Choose from any list or enter any number in the input fields and then ( recommend depends upon xpansion plan that results in a end nber borrowing id t issuing stock Mountainside Medical Goods in embarking on a massive expansion. Assume plans call for opening 20 new stores during the next two years. Each store is scheduled to be 30% larger than the company's existing locations, offering more terms of Inventory and with more elaborate displays, Management estimates that company operations will provide $1.0 million of the cash needed for expansion, Mountainside Medical must raise the remaining $7.5 million from outsiders. (Click the icon to view Information on raising the additional funds.) Read the requirements Requirement 1. Evaluate the effect the two financing alternatives will have on Mountainside's net income and earnings per share two years from now. Begin by selecting the Inbeis needed to analyze the effect of the sternatives on net income and to show earnings per share after the expansion. Next, enter the amounts to show the effect of the borrowing allemative, then enter the amounts to show the effect of the shares of stock alternative. (For amounts with a $0 balance, make sure to enter in the appropriate column. Round the EPS calculation to two decimal places. Enter amounts in dollars instead of millions) Alternative 1 Alternative 2 Requirements Borrow $7.5 million Issue 100,000 shares at 5% of stock 1. Evaluate the effect the two financing alternatives will have on Mountainside's net incom and earnings per share two years from now Less 2. Complete the memo to Mountainside's management discussing the advantages and disadvantages of borrowing and of issuing common stock to raise the needed cash Which method of raising the funds would you recommend? Print Dono Requirement 2. Complete the memo to Mountainside's management discussing the advantages and disadvantages of borrowing and of issuing common stock to the needed cash. Which method of raising funds would you recommend? To: Management of Mountainside Medical Goods Subject: Advantages and disadvantages of borrowing versus issuing stock to raise cash for expansion Choose from any list or enter any number in the input fields and then continue to the next question | Earnings per share after expansion: Income tax expense Interest expense Projected income before interest and income tax Projected income before tax Projected net income Choose from any list or enter any number in the inpl Mourcinio Medico Goods Subject: Advantages and disadvantages of borrowing versus issuing stock to raise cash for expansion The advantages and disadvantages of borrowing to raise cash for expansion are as follows: (If an input field is not used in the table, leave the field emply, do not select a label) Advantages Disadvantages The advantages and disadvantages of issuing stock to raise cash for axpansion are as follows: (If an input field is not used in the table, love the field empty do not select a label) Advantages Disadvantages The method of raising funds that I would recommend depends upon the goal of the company in relation to Pris plan If the company is looking to select an expansion plan that results in a higher earnings per share I would recommend means of raising cash I would recommend to raise cash for expansion. If the company is looking for a "safe" Choose from any stor enter any number in the input fields and then continue to the next question i for e Dilution of the ownership interests of existing stockholders. Increases the financial risk of the company. It avoids the creation of a liability and its related payments. It does not change the present ownership of the business. Results in a higher earnings per share of common stock. Results in a lower earnings per share of common stock. The method of raising funds that I would recommend depends upon the If the company is looking to select an expansion plan that results in a hig means of raising cash I would recommend Choose from any list or enter any number in the input fields and then ( recommend depends upon xpansion plan that results in a end nber borrowing id t issuing stock