Question

You have applied for a job with Abu Dhabi Commercial Bank. As part of its evaluation process, you must take an examination of the time value of money analysis covering the following question.

Draw timelines for each of the following:

1. An AED 100 lump sum cash flow at the end of year 2                                                 
2. An ordinary annuity of AED 100 per year for 3 years                                                
3. An uneven cash flow stream of -50, 100, 75 and 50 at the end of years 0 to 3   

Answer 1

Timelines for each of the following are as follows:

a) An AED 100 lump sum cash flow at the end of year 2                                                 

b) An ordinary annuity of AED 100 per year for 3 years                         

c) An uneven cash flow stream of -50, 100, 75 and 50 at the end of years 0 to 3