No-Toxic-Toys currently has $500,000 of equity andlis planning an $200,000 expansion to meet Increasing demand for Its product. The company currently earns $125,000 In net Income and the expanslon will yleld $62,500 in additional Income before any Interest expense. The company has three optlons: (1) Do not expand, (2) Expand and Issue $200,000 in debt that requires 9% annual Interest, or (3) Expand and ralse $200,000 from equity financing. Requlred For each of the three optlons, compute (a) net Income and (b) return on equity (Net Income / Equity). Ignore any Income tax effects. (Round "Return on equlty" to 1 decimal place.) 2. Equity Financing Don't Expand Debt Financing Income before interest expense Interest expense Net income Equity Return on equity 96