The Term "Additional Funds Needed (AFN)" Is Generally Defined as Follows

question 26

Multiple Choice

The term "additional funds needed (AFN) " is generally defined as follows:

• A) Funds that a firm must raise externally from non-spontaneous sources, i.e., by borrowing or by selling new stock to support operations.
• B) The amount of assets required per dollar of sales.
• 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.
• E) Funds that are obtained automatically from routine business transactions.

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Definitions:

Operating Activities Cash Flows

Cash inflows and outflows related to the core business operations of an entity.

Income Statement

An Income Statement is a financial statement that shows a company's revenues and expenses over a specific period, culminating in net profit or loss.

Delivery Service Revenue

Income earned from providing delivery services to customers, part of operating revenue for businesses in the delivery industry.

Packing Supplies

Materials used for wrapping or protecting goods during shipment or storage, recognized as part of inventory costs in business accounting.