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When Constructing Pro Forma Financial Statements, Which of the Following

Question 17

Multiple Choice

When constructing pro forma financial statements, which of the following equations can be used to estimate additional funds needed (AFN) ?


A) Estimated AFN = Forecasted increase in assets + Forecasted increase in liabilities + Forecasted increase in retained earnings
B) Estimated AFN = Forecasted increase in assets - Financing feedbacks + Forecasted increase in retained earnings
C) Estimated AFN = Forecasted increase in assets - Financing feedbacks - Spontaneously generated funds
D) Estimated AFN = Forecasted increase in liabilities + Financing feedbacks + Spontaneously generated funds
E) Estimated AFN = Forecasted increase in assets - Forecasted increase in liabilities - Forecasted increase in retained earnings

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