A well-established technology firm faced a capital structure decision amidst a market downturn. The management team favored issuing bonds over equity to fund a new research and development initiative. The decision was driven by a perceived separation of funds for innovation projects, maintaining the illusion of preserving existing cash reserves for other purposes. However, this led to an increased debt burden, impacting the company's financial flexibility. Investors, noticing the shift in the capital structure, became concerned about the long-term implications for dividends and stock value. Discuss how mental accounting biases influenced their recent capital structure decision. Evaluate the consequences of choosing debt over equity financing for the new research and development initiative. Propose strategies that you could implement to recognize and mitigate the impact of mental accounting biases in their capital structure decision-making process