The Term "Additional Funds Needed (AFN)" Is Generally Defined as Follows

question 10

Multiple Choice

The term "additional funds needed (AFN) " is generally defined as follows:

• A) Funds that are obtained automatically from routine business transactions.
• B) Funds that a firm must raise externally from non-spontaneous sources,i.e. ,by borrowing or by selling new stock,to support operations.
• C) The amount of assets required per dollar of sales.
• D) The amount of internally generated cash in a given year minus the amount of cash needed to acquire the new assets needed to support growth.
• E) A forecasting approach in which the forecasted percentage of sales for each balance sheet account is held constant.

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Definitions:

Preconventional

A stage in Kohlberg's theory of moral development where moral reasoning is based primarily on consequences and personal benefits.

Formal Operational

A stage in Piaget's theory of cognitive development where individuals can think abstractly and reason logically.

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A stage in Erik Erikson's theory of psychosocial development occurring in late adulthood, where the individual reflects on their life and either achieves a sense of fulfillment or experiences despair.

Generativity Vs. Stagnation

A stage of adult development, according to Erik Erikson, focusing on the challenge of contributing to future generations versus becoming self-absorbed.