You are the CEO of London Electric Cars Inc.. Mary, the COO of the same company, approaches you by suggesting that the company should aim to increase its sales but without increasing the amount of assets needed to produce the extra sales. Mary argues that analysts will see the company with better eyes if her plan is implemented. John, the CFO of the same company is not so convinced by Marys arguments. According to him, it is way easier to simply increase leverage and he argues this would have roughly the same effect on how analysts see the company as the plan proposed by Mary. Explain in detail what both Mary and John are trying to achieve. Whose plan would improve the most the prospects of the company in the long term? Assume the effects of tax shields are negligible and justify your answer.

You are the CEO of London Electric Cars Inc.". Mary, the COO of the same company, approaches you by suggesting that the company should aim to increase its sales but without increasing the amount of assets needed to produce the extra sales. Mary argues that analysts will see the company with better eyes if her plan is implemented. John, the CFO of the same company is not so convinced by Mary's arguments. According to him, it is way easier to simply increase leverage and he argues this would have roughly the same effect on how analysts see the company as the plan proposed by Mary. Explain in detail what both Mary and John are trying to achieve. Whose plan would improve the most the prospects of the company in the long term? Assume the effects of tax shields are negligible and justify your