Problem 2. EBIT-EPS analysis A group of retired business school professors has decide to form a small manufacturing corporation. The company will produce a full line of traditional office furniture. Two financial plans have been proposed by the investors. Plans A is an all-common-equity alternative. Plan B involves the use of financial leverage. A debt issue with a 20-year maturity period will be privately placed. The debt issue will carry an interest rate of 10 percent, and the principal borrowed will amount to S6 million. Under this alternative another $14 million would be raised by selling 700,000 shares of common stock. The corporate tax rate is 50 percent . Problem 2. EBIT-EPS analysis . A. Find the EBIT indifference level associated with the two financial proposals. B. Prepare an analytical income statement that proves EPS will be the same regardless of the plan chosen at the EBIT level found in part (A) C. Prepare an EBIT-EPS analysis chart for this situation . D. If a detailed financial analysis projects that long-term EBIT will always be close to $2.4 milion annually, which plan will provide for the higher EPS