The Timeline Shown Below Best Describes the Cash Flow of Which

question 85

Multiple Choice

The timeline shown below best describes the cash flow of which of the following people?

• A)Joe,who puts down $3500 to buy a car,and then makes annual payments of $1000
• B)Harry,who borrows $3500,and then receives an annual payment of $1000
• C)Karen,who loans a friend $3500,which friend then pays back the loan in four annual installments of $1000
• D)Leo,who borrows $3500,and then pays back the loan in four annual payments of $1000

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Definitions:

Dividend Payable

A liability recorded on the balance sheet for dividends declared by the company but not yet paid to shareholders.

Shareholders' Equity

The amount of capital given to a company by its shareholders plus retained earnings or minus the company's liabilities.

Total Liabilities

The sum of all financial obligations a company owes to external parties, including debts and other payable amounts.