$2$

Multiple Choice

$2$ points

$2.$ Which of the following assumptions is embedded in the AFN equation?

Accounts payable and accruals are tied directly to sales.

$1$

Common stock and long$-$term debt are tied directly to sales.

$2$

Fixed assets, but not current assets, are tied directly to sales.

Last year's total assets were not optimal for last year's sales.

$3$

None of the firm's ratios will change.

$4$

$5$

$$