Foundation, Inc., is comparing two different capital structures: an all$-$equity plan $($Plan I$)$ and a levered plan $($Plan II$).$ Under Plan I, the company would have $145,000$ shares of stock outstanding. Under Plan II$,$ there would be $125,000$ shares of stock outstanding and $2$$$716,000$ in debt outstanding. The interest rate on the debt is $8$ percent, and there are no taxes.

a$.$ If EBIT is $$300,000,$ which plan will result in the higher EPS?

b$.$ If EBIT is $$600,000,$ which plan will result in the higher EPS?

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

$3$

$4$ Input Area:

$\backslash$table$[[$Plan I:,$],[$Shares outstanding,$145,000],[$Plan $1$I:,$],[$Shares outstanding,$125,000],[$Debt outstanding,$$716,000$