7 Study the following four cash flow diagrams Which CFD repr

7. Study the following four cash flow diagrams. Which CFD represents a strict linear gradient series? a. Cash Flow I b. Cash Flow II c. Cash Flow III d. Cash Flow IV e. All four cash flows represent strict linear gradient series. Cash Flow I Cash Flow II A,+7G A1+g) ? 0 1 2 3 4 5 6 7 8012 3 4 5 6 7 8 N-2)G A1- G 3G 2G\' A1 5G Side 9 16 Cash Flow III ash Flow IV

Solution

A strict linear graduient series has its first cash flow as zero.

Cash Flow Diagram III matches the characteristic of such a series with a zero at the end of first period, which is its first cash flow.

Thus, the correct answer is option c. Cash Flow III.