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 capita - that is, its AFN (additional funds needed). Check all that apply. The firm decreases its retention ratio. The firm's inventory turnover decreases, with no effect on the sales forecast. The firm was planning on expanding its production facility, but its management recently decided that the expansion was not necessary. General Forge and Foundry Co. 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 the firm's AFN? Yes, the decrease in profit margin will affect the firm's AFN even though sales have remained constant. No, the firm's AFN will not be affected, because the firm's sales remained constant