Which of the following statements is CORRECT?
A) time lines cannot be constructed where some of the payments constitute an annuity but others are unequal and thus are not part of the annuity.
B) a time line is not meaningful unless all cash flows occur annually.
C) time lines are not useful for visualizing complex problems prior to doing actual calculations.
D) time lines can be constructed to deal with situations where some of the cash flows occur annually but others occur quarterly.
E) time lines can only be constructed for annuities where the payments occur at the end of the periods, i.e., for ordinary annuities.

Question

Quizplus · Accepted Answer

Time lines can be constructed to deal with situations where some of the cash flows occur annually but others occur quarterly. Time lines are a graphical tool used to visualize and analyze cash flows over time, and they can be used for annuities with equal or unequal payments, as well as for other types of cash flows, such as investments or loans. It is not necessary for all cash flows to occur annually or for them to be part of an annuity. Ordinary annuities are the most common type of annuity, but time lines can also be constructed for annuities due, where payments occur at the beginning of the periods.

Which of the Following Statements Is CORRECT