Frankline Coin Company is considering two capital structures

Frankline Coin Company is considering two capital structures. The key information follows. Assume a 40% tax rate. Calculate the financial breakeven point for each plan and the indifference point for the two plans. Calculate the DFL for each plan at the expected EBIT of $50,000. Use this number to explain what change would be expected from a 20% increase (decrease) in EBIT. Indicate over what EBIT range, if any, each structure is preferred. If EBIT is $35,000, what are EPS under each plan? What if EBIT is $60,000?

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