Please do not give solution in image format thanku Foundation, Incorporated, is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). UnderPlan I, the company would have 170,000 shares of stock outstanding. Under Plan II, there would be 120,000 shares of stockoutstanding and $2.4 million in debt outstanding. The interest rate on the debt is 7 percent, and there are no taxes.a. If EBIT is $450,000, what is the EPS for each plan?Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.b. If EBIT is $700,000, what is the EPS for each plan?Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.c. What is the break-even EBIT?Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567.a. Plan I EPSPlan II EPSb. Plan I EPSPlan II EPSc. Break-even EBIT

Earning per share is a measure used to evaluate the earning attributable to one unit of the share.…

Answered: Foundation, Incorporated, is comparing…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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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 $2.2 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? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. b. If EBIT is $600,000, what is the EPS for each plan? Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. c. What is the break-even EBIT? A Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567. a. Plan I EPS Plan II EPS b. Plan I EPS Plan II EPS c. Break-even EBIT
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 $3 million in debt outstanding. The interest rate on the debt is 8 percent, and there are no taxes. a. If EBIT is $675,000, what is the EPS (=NI / # of shares) for each plan? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) b. If EBIT is $925,000, what is the EPS (=NI / # of shares) for each plan? (Do not round intermediate calculations and round your answers to 2 decimal places, e.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.) a. Plan I EPS a. Plan II EPS b. Plan I EPS b. Plan II EPS c. Break-even EBIT
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Kuchar Corporation 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 155,000 shares of stock outstanding. Under Plan II, there would be 105,000 shares of stock outstanding and $1.3 million in debt outstanding. The interest rate on the debt is 6 percent and there are no taxes. a. If EBIT is $200,000, 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 $450,000, what is the EPS for each plan? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) c. What is the break- even EBIT? (Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, rounded to the nearest whole number, e.g ., 1,234,567.)
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Foundation, Incorporated, is comparing two different capital structures, an all-equity plan (Plan I) and a levered plan (Plan II). UnderPlan I, the company would have 190,000 shares of stock outstanding. Under Plan II, there would be 140,000 shares of stockoutstanding and $2 million in debt outstanding. The interest rate on the debt is 8 percent, and there are no taxes.a. If EBIT is $625,000, what is the EPS for each plan?Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.b. If EBIT is $875,000, what is the EPS for each plan?Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.c. What is the break-even EBIT?Note: Do not round intermediate calculations and enter your answer in dollars, not millions of dollars, e.g., 1,234,567.a. Plan I EPSPlan II EPSb. Plan I EPSPlan II EPSc. Break-even EBIT

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