Problem $16-4$ Break$-$Even EBIT $[$LO$1]$

Foundation, Incorporated, 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 $200,000$

shares of stock outstanding. Under Plan II$,$ there would be $150,000$ shares of stock

outstanding and $$2\mathrm{.}2$ million in debt outstanding. The interest rate on the debt is $5$

percent, and there are no taxes.

a$.$ If EBIT is $$350,000,$ what is the EPS for each plan? $($Do not round intermediate

calculations and round your answers to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

b$.$ If EBIT is $$600,000,$ what is the EPS for each plan? $($Do not round intermediate

calculations and round your answers to $2$ decimal places, e$.$g$.,32\mathrm{.}16.)$

c$.$ What is the break$-$even EBIT? $($Do not round intermediate calculations and enter

your answer in dollars, not millions of dollars, e$.$g$.,1,234,567.)$