You work for the CEO of a new company that plans to manufacture and sell a new type of laptop computer. The issue now is how to finance the company, with only equity or with a mix of debt and equity. Expected operating income is $$760,000.$ Other data for the firm are shown below. How much higher or lower will the firm's expected EPS be if it uses some debt rather than only equity, i$.$e$.,$ what is EPSL $-$ EPSU?

$0\%$ Debt, U $60\%$ Debt, L

Oper. income $($EBIT$)$ $$760,000$ $$760,000$

Required investment $$2,500,000$ $$2,500,000$

$\%$ Debt $0\mathrm{.}0\%60\mathrm{.}0\%$

$ of Debt $$0\mathrm{.}00$ $$1,500,000$

$ of Common equity $$2,500,000$ $$1,000,000$

Shares issued, $$10/$share $250,000100,000$

Interest rate NA $10\mathrm{.}00\%$

Tax rate $25\%25\%$