Which of the Following Assumptions Is Embodied in the AFN

question 30

Multiple Choice

Which of the following assumptions is embodied in the AFN equation?

• A) None of the firm's ratios will change.
• B) Accounts payable and accruals are tied directly to sales.
• C) Common stock and long-term debt are tied directly to sales.
• D) Fixed assets, but not current assets, are tied directly to sales.
• E) Last year's total assets were not optimal for last year's sales.

---

Definitions:

Stretch Goals

Goals that represent company-level objectives that require employees of a company to do something beyond what one might reasonably expect.

Foundations of Culture

The fundamental beliefs, values, customs, and social norms that shape and define a society.

New Directions

Indicates changes or novel approaches in strategies, projects, or methods in various contexts, often aiming for improvement or adaptation.

Patent

A legal document granting an inventor exclusive rights to manufacture, use, or sell an invention for a certain period of time.