The term "additional funds needed (AFN)" is generally defined as follows:   a. A forecasting approach in which the forecasted percentage of sales for each balance sheet account is held constant.     b. The amount of assets required per dollar of sales.     c. Funds that are obtained automatically from routine business transactions.     d. Funds that a firm must raise externally from non-spontaneous sources, i.e., by borrowing or by selling new stock to support operations.     e. The amount of internally generated cash in a given year minus the amount of cash needed to acquire the new assets needed to support growth.

Q: Explain how a financial manager may be able to use the cash flow breakeven to plan their financing…

A: The phrase cash flow refers to the net amount of cash and cash equivalents that are transferred in…

Q: Which of the following helps to meet the short-term liquidity position of the concern? a.…

A: The short term liquidity refers to the ability to fulfill the current requirement of the company.…

Q: In proper capital budgeting analysis we evaluate incremental __________ cash flows. Select one: a.…

A: Capital budgeting analysis helps to make financial decisions. A project that is profitable can be…

Q: A very important role of the cash budget is to * O O Determine how to finance dividend payments O…

A: The cash budget record all the cash receipts and cash payments made during the period.

Q: The time value of money concept is given consideration in long-range investment decisions by  Group…

A: The time value of money concept is given consideration in long-range investment decisions by :

Q: Given the information in Exhibit 11.2, calculate the bank's dity sources to liquidity needs. Is…

A: Liquidity sources refer to the mediums of generating money or liquid cash such as cash or cash…

Q: The percentage of sales forecasting method is used by management to forecast the amount of…

A: The percentage of sales forecasting method is a commonly used method for estimating a firm's…

Q: Interperiod equity measurement for governmental funds determines whether a. there is a positive cash…

A: Given: The determination of the measure of the inter-period equity for the government funds.

Q: 1. Concepts used in cash flow estimation Aa Aa Capital budgeting analysis not only requires the…

A: Note: As you are posted 2 questions, I am supposed to give the answer of all the parts of the…

Q: a) Calculate the amount of cash recelve business receive enough cash to cover their liquidity needs?…

A: Funds Requirement   €  10,000 Promissory Note-1  €    5,500 Maturity period 30 days…

Q: Explain statement of cash flows proforma and its significance in budgeting. Provide a hypothetical…

A: The purpose of cash flow budget is to show the insight of cash inflow and outflow on a monthly basis…

Q: A firm's management wants to improve its cash flows with regard to working capital and wants to…

A: Working capital is very important in smooth operations of company and maintain the adequate…

Q: You can come across different situations in your life where the concepts from capital budgeting will…

A: A. An example of externality that can have a negative effect on a firm CANNIBILIZATION The cash flow…

Q: explain how offen a firm that expects to need funds during the coming year might make sure the…

A: Finance decisions of an organization relates to decisions on how a company should structure its…

Q: A higher average daily disbursement float than average daily collection float is more desirable for…

A: Account payables are the payments to be done to the supplier and vendors and they provide credits…

Q: Please answer the following questions 1. _________________ is the discounted net future cash…

A: Profitability Index= PV of cash inflows/Initial cash outlay where, PV= Present Value Balanced…

Q: Which one of these statements is correct? Accountants record sales and expenses after the related…

A: Evaluation of Investment: there are some methods of capital budgeting to evaluate the investment in…

Q: By applying capital to investments with long-term benefits, the company is attempting to produce…

A: The company acquires funds to run its business and using the funds it creates value in the market.…

Q: "As a firm's sales grow its current asset accounts tend to increase. For instance, as sales increase…

A: SOLUTION- AS SALES INCREASE , WE ARE EASILY MEET OUT OUR LIABILITIES AND EXPENSES AND BY INCREASE…

Q: What does each of the following definitions refer to:

A: There are different types of decisions taken by the management to maximize the returns such as…

Q: Growth rate used in forecasting the sales in formula in computing the Additional Funds Needed should…

A: Answer: Growth rate used in forecasting the sales in formula in computing the Additional Funds…

Q: In this method, the company compares the amount spent on the investment with the discounted expected…

A: a. Payback is the period in which the investment can break-even. b. NRV is the difference of…

Q: . If the company’s capital budgeting analyst decidedto show all projected cash flows, both positive…

A: Introduction: Capital budgeting is an investment criterion or decision making mechanism for…

Q: Proper management of a firm’s working capital is vital and challenging due to the______(pick either…

A: Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: 30. The statement of financial position contributes to financial reporting by providing a basis for…

A: Note : Since You have posted a multiple questions, we will solve the first question for you. If you…

Q: Capital budgeting is the​ ________. A. process of planning for investments in long−term assets B.…

A: Capital Budgeting is generally used to analyze return on any investments. It will help an…

Q: Typically, in which of the following phases of the corporate life cycle are cash inflows from…

A: Every organization undergoes four phases that include: a. startup b. growth c. maturity d. decline…

Q: e following methods of capital budgeting tries to equate the present value of cash inflows to…

A: Present value refers to the current valuation for a future sum. Investors determine the present…

Q: Which item is not correct with respect to the treatment of sustainable and transitory items and a…

A: The income statement represents the net income or net loss calculated by deducting the expenses from…

Q: The Chief Finance Officer of Kulit Company follows the policy of matching the maturity of assets…

A: cash, receivable and inventory should be financed with long-term debt or equity

Q: Capital investment (sometimes also referred to as capital budgeting) is a company’s contribution of…

A: Solution Introduction Capital investment means investment in capital assets The capital assets are…

Q: Several factors affect a firm’s need for external funds. Evaluate the effect of each following…

A: The additional fund needed is a concept that is used by the organization to expand their operation…

Q: Which of the following can be used when forecasting cash flows? Select one: a. All of given choices.…

A: Cash flow refers to inflow or outflow of cash from the business during an accounting year.…

Q: All of the following are data rules associated with capital budgeting EXCEPT:   a. Include changes…

A: Capital budgeting is the planning process used to determine long term investments are worth spending…

Q: The adjustments to cash flown from operations necessary to obtain free cash flow to the firm (FCFF)…

A: The cash flow statement is prepared to record cash flow from various activities during the period.

Q: One of the following statement is true about strategies of liquidity management Select one: O a.…

A: Liquidity management measures the efficiency of meeting financial requirements of the business by…

Q: The adjustments to cash flown from operations necessary to obtain free cash flow to the firm (FCFF)…

A: Free cash flow refers to the cash available with an entity after meeting it's operating expenses…

Q: Most firms generate cash inflows every day, not just once at the end of theyear. In capital…

A: Capital budgeting is a process of determining the potentiality of the projects or investments that…

Q: Given that all other factors are constant, External Fund Requirement is   O a. Directly related to…

A: Step-1 External funding means any kind of fund acquire from outside sources of the business. The…

Q: f the following is false? a. Baumol model helps firm to find out their desirable level of cash…

A: Account payable are the amount of money to be given to the suppliers and creditors who provides…

Q: In what sense do accounts payable and accruals provide“spontaneous funds” to a growing firm?

A: Account payable includes the amount which is payable to the outsiders for the purchase of any asset…

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.