Which of the Following Statements Is Correct

question 30

Multiple Choice

Which of the following statements is correct?

• A)Since accounts payable and accrued liabilities must eventually be paid off, as these accounts increase, AFN as calculated by the AFN equation must also increase.
• B)Suppose a firm is operating its fixed assets at below 100% of capacity, but it has no excess current assets. Based on the AFN equation, its AFN will be larger than if it had been operating with excess capacity in both fixed and current assets.
• C)If a firm retains all of its earnings, then it cannot require any additional funds to support sales growth.
• D)Additional funds needed (AFN) are typically raised using a combination of notes payable, long-term debt, and common stock. Such funds are nonspontaneous in the sense that they require explicit financing decisions to obtain them.

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Definitions:

CPU

The Central Processing Unit, a primary component of a computer that performs most of the processing inside a computer.

SuperFetch

A technology in Windows that pre-loads frequently used applications into memory to reduce loading times.

Windows

An operating system developed by Microsoft, widely used on personal computers, featuring a graphical user interface.

RAM

A type of computer memory that is accessible faster than permanent storage, enabling efficient data processing and program execution.