Which of the Following Statements Is CORRECT

question 3

Multiple Choice

Which of the following statements is CORRECT?

• A) The AFN equation for forecasting funds requirements requires only a forecast of the firm's balance sheet.Although a forecasted income statement may help clarify the results, income statement data are not essential because funds needed relate only to the balance sheet.
• B) Dividends are paid with cash taken from the accumulated retained earnings account, hence dividend policy does not affect the AFN forecast.
• C) A negative AFN indicates that retained earnings and spontaneous liabilities are far more than sufficient to finance the additional assets needed.
• D) If the ratios of assets to sales and spontaneous liabilities to sales do not remain constant, then the AFN equation will provide more accurate forecasts than the forecasted financial statements method.
• E) Any forecast of financial requirements involves determining how much money the firm will need, and this need is determined by adding together increases in assets and spontaneous liabilities and then subtracting operating income.

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Definitions:

Inappropriate

Actions or behaviors that are not suitable or proper in a specific context or situation.

Inappropriately Touches

The act of touching another person without consent, often in a sexual manner that is considered offensive or improper.

Physical Closeness

The proximity and tactile interaction between individuals, often leading to psychological and emotional bonding.

Sexual Predation

The act of engaging in unwanted or aggressive sexual behavior towards others, often exploiting power dynamics or the vulnerability of the victim.