Question 7

What is the most correct implication of the additional funds needs (AFN)?

		If AFN is negative, then you must secure additional financing.
		If AFN is positive, then you have extra funds to pay off debt.
		If AFN is positive, then you have extra funds to buy some short-term investments.
		If AFN is positive, then you must issue additional new stock.

Question 8

A company expects $600 million of sales this year, and it forecasts a 15% increase for next year. The CFO uses this equation to forecast inventory requirements at different levels of sales: Inventories = $30.2 + 0.25(Sales). All dollars are in millions. What is the projected inventory turnover ratio for the coming year?

		3.40
		3.89
		4.36
		5.82