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

Question

Quizplus · Accepted Answer

Time lines can be constructed for annuities regardless of whether the payments occur at the beginning or end of periods. Option A is incorrect because a time line can be meaningful regardless of the timing of cash flows. Option B is incorrect because time lines are useful for visualizing complex problems prior to calculations. Option C is incorrect because time lines can include cash flows that occur at different intervals. Option E is incorrect because cash flows on a time line can be uneven amounts as long as they are labeled with the appropriate values.

Which of the Following Statements Is CORRECT