5. Factors that affect the AFN equation Several factors affect a firmil need for exteenal funds. fvatuate the effect of each foliewing factor and place a check next to each factor that is ikeily to increase a firmis need for external eapital-that is. its Af N (additional funds needed). Chenck ail that apply: The fimis faresasted sales are uneopectedly incressed. The firm switches iti supplier for the majonity of its raw materials. The new supplier offers lees favorable credit terms and thus reduces the trade creait availabie to the firm, resuiting in a reductien in accounts pavable. The firm previgusly thought its fived assets more being operated at full cabacity, but now in iearns that it actualy has encess capocity. Dividends to comthon shareholders are pald out of a Per itax earnings. Do these payouts affect a firmis AST?? Yes, drvidends still affect a fiats ANN eren though they are paid out of after-tax eamings. No, Eividends do not affect a frmss APr, because they are pala out of atter tai earningt