The Additional Funds Needed (AFN) to Achieve a Particular Growth

question 38

Multiple Choice

The additional funds needed (AFN) to achieve a particular growth in sales will be negative if:

• A)assets that are required to support the growth can be acquired only in large, discrete amounts.
• B)the amount of plant and equipment that is required to manufacture additional products is substantial.
• C)the amount of internal financing the firm expects to generate is greater than the amount of external funds that must be raised to support the growth.
• D)the firm must issue new long-term bonds to support the increase in sales.
• E)the amount of internally generated funds is more than sufficient to support the forecasted increase in sales.