2. Factors that affect the AFN equation Severat factors affect a firm's need for external funds. Evaluate the effect of each following factor and place a check next to each factor that is likely to increase a firm's need for extemal capital-that is, its AFN (additional funds needed). Check all that apply. The firm switches its supplier for the majority of its raw materials. The new supplier offers less favorable credit terms and thus reduces the trade credit avalable to the firm, resulting in a reduction in accounts payable. The firm improves its production system and increases its protit margin. The firm's forecasted sales are unexpectedly increased. Dividends to comman shareholders are paid out of after-tax earnings. Do these payouts affect a firm's AFN? No, dividends do not affect a firm's NFN, because they are paid out of after tax earnings. Yes, dividends still affect of frms AFN even though they are paid out of after-tax carnings