Whose cash flow is best described by the timeline shown below?

A) Joe, who puts down $3,500 to buy a car, and then makes annual payments of $1,000
B) Harry, who borrows $3,500, and then receives an annual payment of $1,000
C) Karen, who loans a friend $3,500, which friend then pays back the loan in four annual installments of $1,000
D) Leo, who borrows $3,500, and then pays back the loan in four annual payments of $1,000

Question

Whose cash flow is best described by the timeline shown below?

A) Joe, who puts down $3,500 to buy a car, and then makes annual payments of $1,000 
B) Harry, who borrows $3,500, and then receives an annual payment of $1,000 
C) Karen, who loans a friend $3,500, which friend then pays back the loan in four annual installments of $1,000 
D) Leo, who borrows $3,500, and then pays back the loan in four annual payments of $1,000

Quizplus · Accepted Answer

The timeline shows an initial outflow of $3,500, followed by four annual inflows of $1,000 each. This matches Karen's cash flow, who loans $3,500 and receives four annual installments of $1,000 from her friend. None of the other options match the timeline shown.

Whose Cash Flow Is Best Described by the Timeline Shown