Exercise $14-10($Static$)$ Net Present Value Analysis $[$L$014-2]$

Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return that she is earning. For example, three years ago she paid $$13,000$ for $200$ shares of Malti Company's common stock. She received a $$420$ cash dividend on the stock at the end of each year for three years. At the end of three years, she sold the stock for $$16,000.$ Kathy would like to earn a return of at least $14\%$ on all of her investments. She is not sure whether the Malti Company stock provide a $14\%$ return and would like some help with the necessary computations.

Click here to view Exhibit $14$B$-1$ and Exhibit $14$B$-2,$ to determine the appropriate discount factor$($s$)$ using tables.

Required:

Compute the net present value that Kathy earned on her investment in Malti Company stock.

Did the Malti Company stock provide a $14\%$ return?

Complete this question by entering your answers in the tabs below.

Compute the net present value that Kathy earned on her investment in Malti Company stock. $($Negative amounts should be indicated by a minus sign. Round your final answer to the nearest whole dollar amount.$)$

Net present value