Which of the Following Statements Is CORRECT

question 17

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 non-spontaneous in the sense that they require explicit financing decisions to obtain them.
• E) If a firm has a positive free cash flow,then it must have either a zero or a negative AFN.

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Definitions:

Change Management

The approach to transitioning individuals, teams, and organizations to a desired future state, managing the process of change effectively.

Developing New Competencies

The process of acquiring and mastering new skills or capabilities to adapt to changes or improve performance.

Sustaining Momentum

The ongoing effort to maintain progress or activity towards achieving a goal despite challenges.

Reinforcing New Behaviors

The process of encouraging and establishing new behaviors through positive reinforcement or rewards, often used in organizational change and personal development.