We have two firms, one of which does not use debt (Firm U) and a firm that uses debt (Firm L) solve for each organization's returns during periods of expected growth and during periods of bad growth. Assume a 40% tax rate and a 15% interest rate. Please show all calculations.

Firm U (unleveraged)			Firm L (Leveraged)
CA	50	Debt	0		CA	50	Debt	50
FA	50	Equity	100		FA	50	Equity	50
TA	100		100		TA	100		100
	Expected	Bad				Expected	Bad
Sales	100	82.5			Sales	100	82.5
Oper Costs	70	80			Oper Costs	70	80
EBIT	30	2.5			EBIT	30	2.5
Interest					Interest
EBT	30	2.5			EBT	22.5	-5
Taxes					Taxes
Net Inc					Net Inc