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:

Manufacturing Costs

The total expenses involved in the manufacture of products, including direct materials, direct labor, and manufacturing overhead.

Cost of Goods Manufactured

The total cost incurred to produce goods during a specific period, including materials, labor, and overhead costs.

Cost of Goods Sold

The total expense directly associated with producing or purchasing goods that have been sold.

Period Cost

Costs that are expensed in the period they are incurred and are not directly tied to the production of goods.