Create an Excel spreadsheet to organize your answers to the following problem, and submit your Excel...

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Finance

Create an Excel spreadsheet to organize your answers tothe following problem, and submit your Excel file as an attachmentby clicking on the appropriate button on this page.
A company with EBIT of $6,000,000 is considering two financingalternatives. The first alternative would have $25 million of bondsat 8% interest and 1,000,000 common shares outstanding, whereas thesecond would have $47.5 million of bonds at 8% interest and only750,000 shares outstanding. The company is in the 35% taxbracket.
Part 1: Construct the bottom half of the income statement(including EPS) for each financing alternative when EBIT is at$6,000,000.
Part 2: Construct the bottom half of the income statement(including EPS) for each alternative if EBIT increases by 20%.
Part 3: Construct the bottom half of the income statement(including EPS) for each alternative if EBIT decreases by 20%.
Part 4: What is the EBIT/EPS indifference point for thisfirm?
Part 5: Comment on the results of your calculations above. Whatprinciple does this exercise demonstrate?

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Create an Excel spreadsheet to organize your answers tothe following problem, and submit your Excel file as an attachmentby clicking on the appropriate button on this page.A company with EBIT of $6,000,000 is considering two financingalternatives. The first alternative would have $25 million of bondsat 8% interest and 1,000,000 common shares outstanding, whereas thesecond would have $47.5 million of bonds at 8% interest and only750,000 shares outstanding. The company is in the 35% taxbracket.Part 1: Construct the bottom half of the income statement(including EPS) for each financing alternative when EBIT is at$6,000,000.Part 2: Construct the bottom half of the income statement(including EPS) for each alternative if EBIT increases by 20%.Part 3: Construct the bottom half of the income statement(including EPS) for each alternative if EBIT decreases by 20%.Part 4: What is the EBIT/EPS indifference point for thisfirm?Part 5: Comment on the results of your calculations above. Whatprinciple does this exercise demonstrate?