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:

Napoleonic Wars

A series of major conflicts led by Napoleon Bonaparte against various European coalitions, spanning from 1803 to 1815, which reshaped European borders and influenced global history.

Jefferson

Refers to Thomas Jefferson, the third President of the United States, a Founding Father known for drafting the Declaration of Independence.

Madison

This could refer to James Madison, the fourth President of the United States, known as the "Father of the Constitution" for his pivotal role in drafting and promoting the U.S. Constitution and the Bill of Rights.

John Quincy Adams

The sixth President of the United States (1825–1829) and son of President John Adams; known for his strong stance against slavery and significant contributions to American foreign policy.