1. Some liability and net-worth items increase spontaneously with increases in sales. Put a mark (X) by those items listed below that typically increase spontaneously:,,Accounts payable ______ Mortgage bonds _____,Notes payable to banks ______ Common stocks _____,Accrued wages ______ Retained earnings _____,Accrued taxes ______,,2. The following equation is sometimes used to forecast financial requirements:,,AFN = (A0*/S0) ?S – (L0*/S0) ?S – MS1 (1 – POR),,What key assumptions do we make when using this equation? Under what conditions might this assumption not hold true?,,3. What is meant by the term “self-supporting growth rate?” How is this rate related to the AFN equation, and how can that equation be used to calculate the self-supporting growth-rate?,,,4. Why should a student studying finance be made to study financial planning?,
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