Problem 1: Which of these scenarios would be the best choice for a company looking to increase capacity and will yield the highest ROI in their first year of production?
a. Buy 100 units of capacity. Finance the $3,400 purchase entirely with a new bond.
b. Buy 200 units of capacity. Finance the $6,800 purchase entirely with a new bond.
c. Buy 100 units of capacity. Finance the $3,400 purchase entirely with a stock issue.
d. Buy 200 units of capacity. Finance the $6,800 purchase entirely with a stock issue.