Which of the Following Statements Is CORRECT

question 114

Multiple Choice

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.

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Definitions:

Initial Endowment

The initial quantity of goods, services, or resources an individual, institution, or country possesses at the start of an economic analysis.

Relative Prices

The price of one good or service compared to another, indicating their exchange rate in the market.

Normal Good

A type of good for which demand increases when income increases and falls when income decreases, with other factors being constant.

Inferior Good

A type of good for which demand decreases as the income of the consumer increases, opposite to normal goods.