Cash-flow diagram conventions in engineering economy: which statements correctly describe the sign and timing rules used on standard diagrams?

Introduction / Context:Cash-flow diagrams are the grammar of engineering economy. They standardize how we display amount, direction, and timing so that formulas and factors can be applied consistently across problems and software tools.

Given Data / Assumptions:

• Discrete, equal-length periods (years unless otherwise noted).
• Arrows placed exactly at period boundaries or at Time 0.
• Consistent sign convention for inflows and outflows.

Concept / Approach:Using consistent conventions prevents misapplication of factors (e.g., P/A, F/A, P/F). Time 0 is the present; end-of-period cash flows align at integers (1, 2, …). Up arrows denote money received; down arrows denote money paid. These visual rules encode annuities, gradients, and single sums unambiguously.

Step-by-Step Solution:

Verification / Alternative check:

Why Other Options Are Wrong:

Common Pitfalls:

Final Answer: