If net cash flows from operating activities were $194,000, net income were $50,000, and net sales were $600,000, the cash flow yield would equal (Round amounts to one decimal place)
A) $144,000.
B) $244,000.
C) 3.9 times.
D) $406,000

Question

Quizplus · Accepted Answer

Cash flow yield is calculated by dividing net cash flows from operating activities by net sales.

Cash flow yield = Net cash flows from operating activities / Net sales

Cash flow yield = $194,000 / $600,000 = 0.3233

To convert cash flow yield to a multiple, we can divide 1 by the yield.

Cash flow yield as a multiple = 1 / 0.3233 ≈ 3.1

Therefore, the cash flow yield is 0.3233 or approximately 3.1 times. The correct answer is C.

If Net Cash Flows from Operating Activities Were $194,000, Net