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Tom Scott is the owner, president, and primary salesperson for Scott Manufacturing. Because of this, the company's profits are driven by the amount of work

Tom Scott is the owner, president, and primary salesperson for Scott Manufacturing. Because of this, the company's profits are driven by the amount of work Tom does. If he works 55 hours each week, the company's EBIT will be $565,000 per year; if he works a 65-hour week, the company's EBIT will be $655,000 per year. The company is currently worth $3.35 million. The company needs a cash infusion of $1.45 millionand can issue equity or issue debt with an interest rate of 9 percent. Assume there are no corporate taxes.

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