The timeline shown below best describes the cash flow of which of the following people? why? Date (years) 0 1 2 3 4 Cash Flows -$3500 $1000 $1000 $1000 $1000 A, who loans a friend $3500, which friend then pays back the loan in four annual installments of $1000 B, who borrows $3500, and then pays back the loan in four annual payments of $1000 C, who borrows $3500, and then receives an annual payment of $1000 D, who puts down $3500 to buy a car, and then makes annual payments of $1000
The timeline shown below best describes the cash flow of which of the following people? why? Date (years) 0 1 2 3 4 Cash Flows -$3500 $1000 $1000 $1000 $1000 A, who loans a friend $3500, which friend then pays back the loan in four annual installments of $1000 B, who borrows $3500, and then pays back the loan in four annual payments of $1000 C, who borrows $3500, and then receives an annual payment of $1000 D, who puts down $3500 to buy a car, and then makes annual payments of $1000
Chapter16: Working Capital Policy And Short-term Financing
Section: Chapter Questions
Problem 14P
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Question
The timeline shown below best describes the cash flow of which of the following people? why?
|
Date |
0 |
1 |
2 |
3 |
4 |
|
Cash Flows |
-$3500 |
$1000 |
$1000 |
$1000 |
$1000 |
- A, who loans a friend $3500, which friend then pays back the loan in four annual installments of $1000
- B, who borrows $3500, and then pays back the loan in four annual payments of $1000
- C, who borrows $3500, and then receives an annual payment of $1000
- D, who puts down $3500 to buy a car, and then makes annual payments of $1000
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