Several 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 external capital-that is, its AFN (additional funds needed). Check all that apply. The firm was planning on expanding its production facility, but its management recently decided that the expansion was not necessary. The firm's inventory turnover decreases, with no effect on the sales forecast and the cost of goods sold as a percentage of sales. The firm's forecasted sales are unexpectedly increased. Dividends to common shareholders are paid out of after-tax earnings. Do these payouts affect a firm's AFN? Yes, dividends still affect a firm's AFN even though they are paid out of after-tax earnings. No, dividends do not affect a firm's AFN, because they are paid out of after-tax earnings