. Three recent graduates of the computer science program at the Univ of Tennessee are forming a company that will write and distribute new application software for the iPhone. Initially, the corporation will operate in the southern region of Tennessee, Georgia, North Carolina, and South Carolina. A small group of private investors in the Atlanta, Georgia area is interested in financing the group company and two financing plans have been put forth for consideration: The first (Plan A) is an all common equity structure. $2.2 million dollars would be raised by selling common stock at $20 per common share. Plan B would involve the use of financial leverage. $1.4 million dollars would be raised by selling bonds with effective interest rate of 10.7% (per annum), and the remaining $0.8 million would be raised by selling common stock at the $20 price per share. The use of financial leverage is considered to be a permanent part of the firm's capitalization, so no fixed maturity date is needed for the analysis. A 35% tax rate is deemed appropriate for the analysis. a. Find the EBIT indifference level associated with the two financing plans. The EBIT indifference level associated with the 2 financing plans is $ (round to nearest dollar) b. A detailed financial analysis of the firms prospects suggests that the long-term EBIT will be above $306,000 annually. Taking this into consideration, which plan will generate the higher EPS?