A private equity fund has produced the following forecasts for a potential target fora LBO prior to the LBO (pre-LBO). Data are in millions of dollars.

A private equity fund has produced the following forecasts for a potential target fora LBO prior to the LBO (pre-LBO). Data are in millions of dollars.

Note: I am assuming that taxes are zero for simplicity, so net income = EBIT –Interest.

Which option is correct?