Passit

First, NI decreases -------  EBIT is the same before and after. After the capital structure changed, the co. has to pay interest on debt. So NI will be lower.

Second, Return on Equity= NI/ EQUITY --------- NI decreased. But Equity decreased in a much larger scale. Because Asset= Lia+ Equity Asset decreased and Liability increased so Equity decreased largely. In that case ROE increased.

You don't really need calculation to find the answer

Hope it helps