Which of the following statements is CORRECT? 1. A time line is not meaningful unless all cash flows occur

annually. 2. Time lines are not useful for visualizing complex problems

prior to doing actual calculations. 3. Time lines cannot be constructed in situations where some of

the cash flows occur annually but others occur quarterly. 4. Time lines can be constructed for annuities where the

payments occur at either the beginning or the end of the

periods. 5. Some of the cash flows shown on a time line can be in the

form of annuity payments, but none can be uneven amounts.

The correct answer is option 4. Timelines can be constructed for

annuities where the payments occur at either the beginning or the

end of the periods. And, the payments can be unequal.

Option 1 is incorrect because A timeline is useful for

non-annual payments as well.

Option 2 is incorrect because timelines are useful for

visualizing complex problems prior to doing actual

calculations.

Option 3 is incorrect because timelines can be constructed in

situations where some of the cash flows occur annually but others

occur quarterly.

Option 5 is incorrect because the payments can be uneven.

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