6. Factors that affect the AFN equation Several factors affect afirm'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 external capital-that is, its AFN (additional funds needed). Check all that apply. ed The firm's forecasted sales are unexpectedly increased The firm improves its production system and increases its profit marpin. Management has decided that the term needs to keep more inventory on hand throughout the year General vorge and Foundry Inc. has seen its profit margin eroded by increased competition over the last year, but its sales have remained steady. Assuming everything else is held constant, will this affect them's AFN Yes, the decrease in profit marginwill affect the tim's AFN even though its sales have remained constant. No, the tem's A will not be affected, because the sales have remained constant