To fully account for financing feedbacks in financial forecasting, all of the steps in the projected balance sheet method must be repeated until _____ equal zero.
A)financing feedbacks
B)spontaneously generated funds
C)additional funds needed (AFN)
D)additions to retained earnings
E)marginal revenues minus marginal expenses

Question

To fully account for financing feedbacks in financial forecasting, all of the steps in the projected balance sheet method must be repeated until _____ equal zero. 
A)financing feedbacks
B)spontaneously generated funds
C)additional funds needed (AFN)
D)additions to retained earnings
E)marginal revenues minus marginal expenses

Quizplus · Accepted Answer

The projected balance sheet method involves forecasting a company's financial statements including the balance sheet, income statement, and statement of cash flows. When accounting for financing feedbacks, the additional funds needed (AFN) must be calculated, which represents the amount of funding required to support the projected growth of the company. To fully account for financing feedbacks, the steps of the projected balance sheet method must be repeated until the AFN equals zero, indicating that the company has achieved a sustainable level of growth without the need for additional external funding. Therefore, the correct answer is C - additional funds needed (AFN).

To Fully Account for Financing Feedbacks in Financial Forecasting, All