Q4: How would the key profitability ratios of the firm be affected if the firm were to raise all of the capital by issuing 5-year notes?

PLEASE ANSWER Q4/5 with explanations, thank you!

Q4: How would the key profitability ratios of the firm be affected if the firm were to raise all of the capital by issuing 5-year notes? All Debt Income Statement Information All Equity - No Debt Income Statement Information Current Current 15,000,000 2,250,000 Growth in Revenues Revenues EBIT Interest EBT Net Income With $5,000,000 Expansion Worst Case Expected Case Best Case 10% 30% 50% 16,500,000 $ 19,500,000 $ 22,500,000 2,475,000 $ 2,925,000 $ 3,375,000 500,000 $ 500,000 $ 500,000 1,975,000 $ 2,425,000 $ 2,875,000 1,185,000 $ 1,455,000 $ 1,725,000 $ $ $ $ $ Best Case 50% 22,500,000 3,375,000 Growth in Revenues Revenues EBIT Interest EBT Net Income $ $ $ $ $ 15,000,000 2,250,000 $ $ $ $ $ With $5,000,000 Expansion Worst Case Expected Case 10% 30% 16,500,000 $ 19,500,000 $ 2,475,000 $ 2,925,000 $ $ $ 2,475,000 $ 2,925,000 $ 1,485,000 $ 1,755,000 $ 2,250,000 1,350,000 2,250,000 1,350,000 3,375,000 2,025,000 # of shares EPS 1,000,000 1.350 1,000,000 1.185 1,000,000 1.455 1,000,000 1.725 # of shares EPS 1,000,000 1.350 1,500,000 0.990 1,500,000 1.170 $ 1,500,000 1.350 $ $ $ $ $ $ $ Balance Sheet Information Assets Total Assets Balance Sheet Information Assets Total Assets $ 15,000,000 $ 20,000,000 $ 20,000,000 $ 20,000,000 $ 15,000,000 $ 20,000,000 $ 20,000,000 $ 20,000,000 $ 5,000,000 5,000,000 5,000,000 Libilities and Owner's Equity Current Liabilities Debt Equity Total Liabilities and O.E. $ $ $ $ $ $ 5,000,000 $ 5,000,000 $ 10,000,000 $ 20,000,000 $ 5,000,000 $ 5,000,000 5,000,000 $ 5,000,000 10,000,000 $ 10,000,000 20,000,000 $ 20,000,000 Libilities and Owner's Equity Current Liabilities Debt Equity Total Liabilities and O.E. $ $ $ $ $ $ $ $ 5,000,000 $ $ 15,000,000 $ 20,000,000 $ 5,000,000 $ $ 15,000,000 $ 20,000,000 $ $ 10,000,000 15,000,000 10,000,000 15,000,000 15,000,000 20,000,000 Long-term Debt/Equity Ratio Net Profit Margin Total Asset Turnover Equity Multiplier Return on Assets Return on Equity 0.00% 9.00% 1.00 1.50 9.00% 13.50% 50.00% 7.18% 0.83 2.00 5.93% 11.85% 50.00% 7.46% 0.98 2.00 7.28% 14.55% 50.00% 7.67% 1.13 2.00 8.63% 17.25% Long-term Debt/Equity Ratio Net Profit Margin Total Asset Turnover Equity Multiplier Return on Assets Return on Equity 0.00% 9.00% 1.00 1.50 9.00% 13.50% 0.00% 9.00% 0.83 1.33 7.43% 9.90% 0.00% 9.00% 0.98 1.33 8.78% 11.70% 0.00% 9.00% 1.13 1.33 10.13% 13.50% Q5: What is the Break-Even EBIT? What does it indicate to you? Data for Break-Even EBIT Graph: All Debt Income Statement Information Growth in Revenues Revenues EBIT Interest EBT Net Income $ $ $ $ $ Additional Scenarios -50% -30% 7,500,000 $ 10,500,000 $ 1,125,000 $ 1,575,000 $ 500,000 $ 500,000 $ 625,000 1,075,000 $ 375,000 $ 645,000 $ With $5,000,000 Expansion Worst Case - 10% 10% 13,500,000 $ 16,500,000 $ 2,025,000 $ 2,475,000 $ 500,000 $ 500,000 $ 1,525,000 $ 1,975,000 S 915,000 $ 1,185,000 $ Expected Case 30% 19,500,000 $ 2,925,000 $ 500,000 $ 2,425,000 $ 1,455,000 $ Best Case 50% 22,500,000 3,375,000 500,000 2,875,000 1,725,000 # of shares Equity 1,000,000 10,000,000 $ 1,000,000 10,000,000 $ 1,000,000 10,000,000 $ 1,000,000 10,000,000 $ 1,000,000 10,000,000 $ 1,000,000 10,000,000 $ EPS $0.3750 $0.6450 $0.9150 $1.1850 $1.4550 $1.7250 No Debt Income Statement Information Growth in Revenues Revenues EBIT Interest EBT Net Income Additional Scenarios -50% -30% 7,500,000 $ 10,500,000 $ 1,125,000 $ 1,575,000 $ $ $ 1,125,000 $ 1,575,000 $ 675,000 $ 945,000 $ $ $ $ $ $ With $5,000,000 Expansion Worst Case - 10% 10% 13,500,000 $ 16,500,000 $ 2,025,000 $ 2,475,000 $ $ $ 2,025,000 $ 2,475,000 $ 1,215,000 $ 1,485,000 $ Expected Case 30% 19,500,000 $ 2,925,000 $ $ 2,925,000 $ 1,755,000 $ Best Case 50% 22,500,000 3,375,000 3,375,000 2,025,000 # of shares Equity 1,500,000 15,000,000 1,500,000 15,000,000 1.500.000 15,000,000 1,500,000 15,000,000 1,500,000 15,000,000 1,500,000 15,000,000 $ EPS $0.4500 $0.6300 $0.8100 $0.9900 $1.1700 $1.3500 Break-Even EBIT: All Equity Financing Proposed Capital Structure with Debt EPS EPS 500,000.00 EBIT 1,500,000 EBIT - $ 1,000,000 Break-Even EBIT = 1,500,000 At Break-Even EBIT: All Equity Financing Proposed Capital Structure with Debt EPS = EPS After-Tax EPS EPS