"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 $$716,000$ in debt outstanding. The interest$$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?"

Input Area:

Plan I:

Shares outstanding $145,000$

Plan II:

Shares outstanding $125,000$

Debt outstanding $$716,000$

Interest rate $8\%$

EBIT $$300,000$

EBIT $$600,000$

$($Use cells A$6$ to B$13$ from the given information to complete this question.$)$

Output Area:

Net income EPS

Plan I $$300,000$ $$2\mathrm{.}07$

Plan II $$1\mathrm{.}94$

Plan I $$600,000$ $$4\mathrm{.}14$

Plan II $$4\mathrm{.}34$

Breakeven EBIT