Which of the Following Best Defines the Term "Additional Funds

question 23

Multiple Choice

Which of the following best defines the term "additional funds needed (AFN) "?

• A)funds that are obtained automatically from routine business transactions
• B)funds that a firm must raise externally from nonspontaneous sources, i.e., by borrowing or by selling new stock to support operations
• C)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
• D)a forecasting approach in which the forecasted percentage of sales for each balance sheet account is held constant

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Definitions:

Negative Correlation

A relationship between two variables in which one variable increases as the other decreases, and vice versa, indicating an inverse relationship.

Interest Rates

The cost of borrowing money, expressed as a percentage of the amount borrowed, paid by the borrower to the lender for the use of funds.

House Sales

The process of buying or selling residential properties.

Positive Correlation

A relationship between two variables in which both variables move in the same direction, meaning as one variable increases, the other also increases, or as one decreases, the other also decreases.