Rufus T$.$ Firefly, CEO of Fredonia Machine Tools, Inc. is concerned that Fredonia's earnings will be below expectations for $2021.$Firefly instructs the accounting department to capitalize operating expenses for $$1,500,000$ as a way to improve Fredonia's financial performance. Why would capitalizing operating expenses result in improved operating income?$1)$ Capitalizing operating expenses would have no effect on operating income.

$2)$ Capitalizing operating expenses would result in higher expenses and lower assets

$3)$ Capitalizing operating expenses increases assets and lowers expenses $4)$ Capitalizing operating expenses results in higher cash balances