24

QUESTION 24 Yashin Inc. plans to issue new long-term bonds to finance a $5 million plant expansion. The expanded plant will operate using new robotic technology with a resultant decrease in variable operating costs. What impact will the new debt have on the operating and financial leverage of Yashin Inc.? O 1. Both its operating and financial leverage will decrease O 2. it's operating leverage will decrease and its financial leverage will increase 3. Neither it's operating nor financial leverage will change 4. Both its operating and financial leverage will increase