1) Which of the following statements is correct?

A) Time lines cannot be constructed in situations when the cash flows occur at yearly and quarterly frequencies

B) Time lines are useful for visualizing complex problems prior to doing actual calculations.

C) Time lines cannot be constructed for annuities where the payments occur at the beginning of the periods.

D) A time line is not meaningful unless all cash flows occur annually

2) Suppose you just won the state lottery, and you have a choice between receiving $2,550,000 today or $250,000 a year for 20 years, with the first payment starting one year from today. What annual interest rate does the second choice provide?