The Norman Automatic Mailer Machine Company is planning to expand production because of the increased volume of mailouts. The increased productivity will cost $2,000,000. The expansion can be financed either by bonds at an interest rate of 12 percent or by selling 50,000 shares of common stock at $40 per share. The current income statement (before expansion) is as follows: Sales. NORMAN AUTOMATIC MAILER Income Statement 201X $3,000,000 $1,200,000 800,000 1,000,000 400,000 600,000 210,000 $ 390,000 100,000 $ 3.90 Less: Variable costs (40%). ........................... Fixed costs ............................................... Earnings before interest and taxes ....................... Less: Interest expense .................................... Earnings before