HP 10bII - Signs of Cash Flows

16,567.20
Up-arrows represent positive
cash flows (money received).
5,000.00
The horizontal line represents
time. It is divided into regular
periods.
Down-arrows represent negative
cash flows (money paid out).
-5,000.00
-6,000.00
-7,000.00
Any cash flow example can be represented by a cash flow diagram. As
you draw a cash flow diagram, identify what is known and unknown
about the transaction.
Time is represented by a horizontal line divided into regular time periods.
Cash flows are placed on the horizontal line when they occur. Where no
arrows are drawn, no cash flows occur.
Signs of Cash Flows
In cash flow diagrams, money invested is shown as negative and money
withdrawn is shown as positive. Cash flowing ou is negative, cash flowing
in is positive.
For example, from the lender's perspective, cash flows to customers for
loans are represented as negative. Likewise, when a lender receives money
from customers, cash flows are represented as positive. In contrast, from
the borrower's perspective, cash borrowed is positive while cash paid
back is negative.
46 4:Picturing Financial Problems