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Exercise 10-1 (Algo) Debt versus equity financing LO A1 Green Foods currently has $400,000 of...

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Exercise 10-1 (Algo) Debt versus equity financing LO A1 Green Foods currently has $400,000 of equity and is planning an $160,000 expansion to meet increasing demand for its product. The company currently eams $60,000 in net income, and the expansion will yield $30,000 in additional income before ary interest expense. The company has three options: (1) do not expand, (2) expand and issue $160.000 in debt that requires payments of 12% annual interest, or (3) expand and raise $160,000 from equity financing. For each option, compute (o) net income and (b) return on equity (Net Income + Equityl. Ignore any income tax effects. (Round "Return on equity" to 1 decimal place.)

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