Sean Laarner paid $18,000 for 900 common shares of Acme Company on January 2, four years ago Laarner received an $0 80 per share dividend on the shares at the end of each year for four years At the end of four years, he sold the shares for $22,500 Laarners goal is to earn a mini mum return of 12 on...

Years Amount of Cash Flows Present Value of Cash Flows Purchase of the shares Now 18000 18000 A ...

Sean Laarner paid $18,000 for 900 common shares of Acme Company on January 2, four years ago.

Question:

Sean Laarner paid $18,000 for 900 common shares of Acme Company on January 2, four years ago. Laarner received an $0.80 per share on the shares at the end of each year for four years. At the end of four years, he sold the shares for $22,500. Laarner’s goal is to earn a mini- mum return of 12% on all of his investments.
Required:
Ignore income taxes. Did Laarner earn a 12% return on the shares? Use the method and the general format shown in Exhibit 13–1. Round all computations to the nearest whole dollar.
Net Present Value
What is NPV? The net present value is an important tool for capital budgeting decision to assess that an investment in a project is worthwhile or not? The net present value of a project is calculated before taking up the investment decision at... Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...