The firm projected its proforma of financial statements using AFN method and finds that next year its AFN is $2 million. Its total asset this year is $40 million and its net sales this year is $50 million. The CFO has decided to finance its entire projected AFN through issuing long-term debt. What would you expect to happen in next years financial ratio based on AFN method?

• A. Its times interest earned will go down.
• B. Its return on equity will go down.
• C. Its equity multiplier will go down.
• D. Its current ratio will go down.
• E. Its quick ratio will go down.