=+A8-5 You hold a 25% common stock interest in the family-owned business, a vending machine Financing business company. Your sister, who is the manager, has proposed an expansion of plant facilities at an expansion expected cost of $5,000,000. Two alternative plans have been suggested as methods offinancing the expansion. Each plan is briefly described as follows:

Plan 1. Issue $5,000,000 of 20-year, 7% bonds at face amount.

Plan 2. Issue an additional 87,500 shares of $5 par common stock at $20 per share, and

$3,250,000 of 20-year, 7% bonds at face amount.

The balance sheet as ofthe end ofthe previous fiscal year is as follows: