The term “additional funds needed (AFN)” is generally defined as follows:

a) Funds that are obtained automatically from routine business transactions.

b) Funds that a firm must raise externally from non-spontaneous sources, i.e., by borrowing or by selling new stock, to support operations.

c) The amount of assets required per dollar of sales.

d) The amount of internally generated cash in a given year minus the amount of cash needed to acquire the new assets needed to support growth.

e) A forecasting approach in which the forecasted percentage of sales for each balance sheet account is held constant.

  • avatar
    4 Aug 2012 05:05:00 GMT

    correct answer is b)

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