Which of the following statements is correct? a. suppose a firm is operating its fixed assets at below 100% of capacity, but it has no excess current assets. based on the afn equation, its afn will be larger than if it had been operating with excess capacity in both fixed and current assets. b. additional funds needed (afn) are typically raised using a combination of notes payable, long-term debt, and common stock. such funds are non-spontaneous in the sense that they require explicit financing decisions to obtain them. c. since accounts payable and accrued liabilities must eventually be paid off, as these accounts increase, afn as calculated by the afn equation must also increase. d. if a firm has a positive free cash flow, then it must have either a zero or a negative afn. e. if a firm retains all of its earnings, then it cannot require any additional funds to support sales growth.

Required information lansing company’s 2017 income statement and selected balance sheet data (for current assets and current liabilities) at december 31, 2016 and 2017, follow. lansing company income statement for year ended december 31, 2017 sales revenue $130,200 expenses cost of goods sold 53,000 depreciation expense 17,500 salaries expense 29,000 rent expense 10,100 insurance expense 4,900 interest expense 4,700 utilities expense 3,900 net income $7,100 lansing company selected balance sheet accounts at december 31 2017 2016 accounts receivable $6,700 $8,000 inventory 3,080 2,090 accounts payable 5,500 6,800 salaries payable 1,100 810 utilities payable 440 270 prepaid insurance 370 500 prepaid rent 440 290 required: prepare the cash flows from operating activities section only of the company’s 2017 statement of cash flows using the indirect method. (amounts to be deducted should be indicated with a minus sign.)