The External Funds Needed (EFN)equation does not measure the:
A)additional asset requirements given a change in sales.
B)rate of return to shareholders given the change in sales.
C)additional total liabilities raised given the change in sales.
D)net income expected to be earned given the change in sales.
E)None of the above.

Question

Quizplus · Accepted Answer

The External Funds Needed (EFN) equation calculates the additional assets required and the total liabilities raised to support the change in sales, as well as the resulting increase in net income. However, it does not measure the rate of return to shareholders, which is not directly related to the EFN calculation. Therefore, option B is the correct answer.

The External Funds Needed (EFN)equation Does Not Measure The