Which one is most correct about AFN (additional fund needed) A. AFN > 0 happens when a firm exhausts internal funds to support its operations. B. Everything else remains unchanged, if a firm’s profit margin is expected to go up, then its AFN is more likely to increase as well. C. If everything else remains unchanged, when a firm increases its plowback ratio, its AFN will increase too. D. Companies with relatively high assets-to-sales ratios require a relatively large amount of new assets for any given increase in sales; hence, they must have a greater need for external financing.

Which one is most correct about AFN (additional fund needed) A. AFN > 0 happens when a firm exhausts internal funds to support its operations. B. Everything else remains unchanged, if a firm’s profit margin is expected to go up, then its AFN is more likely to increase as well. C. If everything else remains unchanged, when a firm increases its plowback ratio, its AFN will increase too. D. Companies with relatively high assets-to-sales ratios require a relatively large amount of new assets for any given increase in sales; hence, they must have a greater need for external financing.

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter9: Corporate Valuation And Financial Planning

Section: Chapter Questions

Problem 6Q

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