To compute the additional funds (AFN) the firm must raise using external financing sources to support a particular level of forecasted operations, the firm should _____.
A)subtract the funds it expects to generate spontaneously from the forecasted sales
B)subtract the forecasted operating costs from its existing total liabilities
C)add the funds it expects to generate internally to the funds it expects to generate spontaneously
D)subtract the funds it expects to generate internally from the funds that are required to attain the forecasted sales
E)add the funds that it expects to generate spontaneously to its existing retained earnings balance

Question

To compute the additional funds (AFN) the firm must raise using external financing sources to support a particular level of forecasted operations, the firm should _____. 
A)subtract the funds it expects to generate spontaneously from the forecasted sales
B)subtract the forecasted operating costs from its existing total liabilities
C)add the funds it expects to generate internally to the funds it expects to generate spontaneously
D)subtract the funds it expects to generate internally from the funds that are required to attain the forecasted sales
E)add the funds that it expects to generate spontaneously to its existing retained earnings balance

Quizplus · Accepted Answer

The additional funds needed (AFN) formula involves subtracting internally generated funds from the total funds required to support forecasted sales.

To Compute the Additional Funds (AFN) the Firm Must Raise