Question: A firm is considering replacing its current production facility with a new robotics production facility. As a result of this move, the firms fixed costs

A firm is considering replacing its current production facility with a new robotics production facility. As a result of this move, the firm’s fixed costs will increase dramatically. To finance this new project, the firm is considering either issuing common stock or issuing debt. Should the firm consider these two decisions (whether to build the robotics facility and how to finance it) separately? How might the investment decision impact the financing decision?

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