The term additional funds needed (AFN) is generally defined as follows: a. A forecasting approach in which
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Question:
The term "additional funds needed (AFN)" is generally defined as follows:
a. A forecasting approach in which the forecasted percentage of sales for each balance sheet account is held constant.
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. Funds that are obtained automatically from routine business transactions.
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