Which of the following equations represents a simple and effective way to think about anticipated external funding?
A)External funds required = assets - liabilities - equity
B)External funds required = assets + liabilities - equity
C)External funds required = assets + liabilities + equity
D)External funds required = assets - liabilities + equity

Question

Quizplus · Accepted Answer

The correct equation for anticipated external funding is External funds required = assets - liabilities - equity. This equation effectively captures the need for external funding by considering the gap between what a company owns (assets) and what it owes (liabilities and equity).

Which of the Following Equations Represents a Simple and Effective