Problem:

A company expects sales to increase during the coming year, and it is using the AFN equation to forecast the additional capital that it must raise. Which of the following conditions would cause the AFN to increase?

1. The company increases it's dividend payout ratio

2. The company decides to stop taking discounts on purchased materials

3. The company's profit margin increases

4. The company begins to pay employees monthly rather than weekly

5. The company previously thought its fixed assets were being operated at full capacity, but now it learns that it actually has excess capacity.

Note: Please provide equation and explain comprehensively and give step by step solution.