Which of the following statements is CORRECT?
A) Some of the cash flows shown on a time line can be in the form of annuity payments, but none can be uneven amounts.
B) A time line is not meaningful unless all cash flows occur annually.
C) Time lines are useful for visualizing complex problems prior to doing actual calculations.
D) Time lines cannot be constructed in situations where some of the cash flows occur annually but others occur quarterly.
E) Time lines cannot be constructed for annuities where the payments occur at the beginning of the periods.

Question

Quizplus · Accepted Answer

Time lines are very useful for visualizing cash flows and helping with calculations, especially in complex problems. They can be constructed for a variety of cash flow patterns, including annuity payments and uneven amounts. They are not limited to annual cash flows and can be constructed for quarterly or even daily cash flows. Additionally, time lines can be constructed for annuities with payments at the beginning of the periods, although this requires a slight modification to the traditional time line format.

Which of the Following Statements Is CORRECT