A Company Had Average Total Assets of $2,316,000,total Cash Flows

question 94

Multiple Choice

A company had average total assets of $2,316,000,total cash flows of $1,320,000,cash flows from operations of $455,000,and cash flows for plant assets of $850,000.The cash flow on total assets ratio equals:

• A)17.33%.
• B)20.97%.
• C)53.53%.
• D)34.47%.
• E)19.65%.

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Definitions:

Lessor

A person or entity that owns an asset and leases it to another party (lessee) under a lease agreement.

Lessee

The party in a lease agreement who has the right to use the property, plant, or equipment leased from the lessor for a specified period.

Sale and Leaseback

A financial transaction where the owner sells an asset and immediately leases it back from the buyer, often used in real estate.

Financial Lease

A type of lease where the lessee has use of the asset for most of its useful life, and the lease payments are designed to cover the full cost of the asset, often with an option to purchase the asset at the end of the lease term.