Problem 16-4 Break-Even EBIT [LO1] 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 205,000 shares of stock outstanding. Under Plan II, there would be 155,000 shares of stock outstanding and $2.3 million in debt outstanding. The interest rate on the debt is 6 percent, and there are no taxes. a. If EBIT is $250,000, what is the EPS for each plan? (Do not round Intermediate calculations and round your answers to 2 decimal places, e.g.. 32.16.) b. If EBIT is $500,000, what is the EPS for each plan? (Do not round Intermediate calculations and round your answers to 2 decimal places, c.g., 32.16.) 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.)

Problem 16-4 Break-Even EBIT [LO1] Foundation, Incorporated, Is comparing two different capital structures: an all-equity pian (Plan I) and a levered plan (PIan II). Under Plan I, the company would have 205,000 shares of stock outstanding. Under Plan II, there would be 155,000 shares of stock outstanding and $2.3 million in debt outstanding. The interest rate on the debt is 6 percent, and there are no taxes. a. If EBIT is $250,000, what is the EPS for each plan? (Do not round Intermedlate colculations and round your answers to 2 decimal places, e.g., 32.16.) b. If EBIT is $500,000. What is the EPS for each plan? (Do not round Intermedlate colculations and round your answers to 2 decimal places, e.g., 32.16.) c. What is the break-even EBIT? (Do not round Intermedlate calculations ond enter your answer in dollars, not millions of clollers, e.9.. 1, 234,367.)