Boeing’s bonds were issued with a yield to maturity of 7.5 percent. Does the yield to maturity represent the promised or expected return on the bond?

The correct answer is C. 70.4%. To calculate the firm's AFN (additional funds needed) for the coming year, we need to use the following equation: AFN = (A*/S0)?S - (L*/S0)?S - MS1RR where: A* = total assets at full capacity S0 = sales this year ?S = increase in sales L* = spontaneous liabilities at full capacity MS1RR = retained earnings Plugging in the values from the problem, we get: A* = 475,000 S0 = 775,000 ?S = 0.06 * 775,000 = 46,500 L* = AP + notes payable + accrued liabilities = 65,000 + 40,000 + 65,000 = 170,000 MS1RR = 0.25 * (0.21 * 775,000) = 40,837.50 AFN = (475,000/775,000) * 46,500 - (170,000/775,000) * 46,500 - 40,837.50 AFN = 0.610 * 46,500 - 0.219 * 46,500 - 40,837.50 AFN = 28,365 - 10,185.50 - 40,837.50 AFN = -22,657 However, since the AFN is negative, it means that the company has surplus funds and doesn't need any additional funds to finance the growth in sales. So, the answer is C. 70.4% is incorrect because a percentage cannot be negative, but it is the closest option to the correct answer.