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 earns $100,000 in net income, and the expansion will yield $50,000 in additional income before any interest expense. The company has three options: (1) do not expand, (2) expand and issue $160,000 in debt that requires payments of 8% annual interest, or (3) expand and raise $160,000 from equity financing. For each option, compute (a) net income and (b) return on equity (Net Income Equity). Ignore any income tax effects. Note: Round "Return on equity" to 1 decimal place. 1 Don't Expand 2 Debt Financing 3 Equity Financing Income before interest expense Interest expense 12,800 Net income Equity Return on equity $ 100,000 $ 137,200 $ 150,000 $ 400,000 $ 400,000 25.0 % 34.3 % 26.8 %