(12–2)

AFN Equation Refer to Problem 12-1. What would be the additional funds needed if the company’s year-end 2010 assets had been $4 million? Assume that all other numbers, including sales, are the same as in Problem 12-1 and that the company is operating at full capacity.

Why is this AFN different from the one you found in Problem 12-1? Is the company’s “capital intensity” ratio the same or different?