Rolston Corporation is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). Under Plan I, Rolston would have 190,000 shares of stock outstanding. Under Plan II, there would be 140,000 shares of stock outstanding and $2.00 million in debt outstanding. The interest rate on the debt is 8 percent and there are no taxes.

a. If EBIT is $625,000, what is the EPS for each plan?

Plan 1 $___

Plan 2 $___

b. If EBIT is $875,000, what is the EPS for each plan?

Plan 1 $___

Plan 2 $___

c. What is the break-even EBIT? $___