Which of the Following Statements Is CORRECT

question 45

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 to deal with situations where some of the cash flows occur annually but others occur quarterly.
• D) time lines can only be constructed for annuities where the payments occur at the end of the periods, i.e., for ordinary annuities.
• E) time lines can be constructed where some of the payments constitute an annuity but others are unequal and thus are not part of the annuity.

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Definitions:

Changes in Receivables

This refers to the variations in the amounts owed to a company by its customers over a specific period.

Sales Growth

The increase in sales over a specific period of time, often used as a measure of company performance.

Receivables Growth

A rise in the total money that customers owe a company for products or services provided on credit.

Long-Term Credit Sales

Sales made on credit with repayment terms extending beyond the normal operating cycle or one year.