HW 14 a Saved Help Save & Exit Submit HW. @ Check my work 2 6 points Linda Clark received $231,000 from her mother's estate. She placed the funds into the hands of a broker, who purchased the following securities on Linda's behalf: a. Common stock was purchased at a cost of $126,000. The stock paid no dividends, but it was sold for $210,000 at the end of three years. b. Preferred stock was purchased at its par value of $39,000. The stock paid a 9% dividend (based on par value) each year for three years. At the end of three years, the stock was sold for $22,000. c. Bonds were purchased at a cost of $66,000. The bonds paid annual interest of $4,000. After three years, the bonds were sold for $68,000. eBook Print References The securities were all sold at the end of three years so that Linda would have funds available to open a new business venture. The broker stated that the investments had earned more than a 13% return, and he gave Linda the following computations to support his statement: $ 84,000 Common stock: Gain on sale ($210,000 - $126,000) Preferred stock: Dividends paid (9% x $39,000 X 3 years) Loss on sale ($22,000 - $39,000) Bonds: Interest paid ($4,000 * 3 years) Gain on sale ($68,000 - $66,000) Net gain on all investments 10,530 (17,000) 12,000 2,000 $ 91,530 HW 14 A Saved Help Save & Exit Submit Check my work 2. $91,530 + 3 years $231,000 - 13.20 Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. 6 points Required: 1-a. Using a 13% discount rate, compute the net present value of each of the three investments. 1-b. On which investment(s) did Linda earn a 13% rate of return? eBook Print 2. Considering all three investments together, did Linda earn a 13% rate of return? 3. Linda wants to use the $300,000 proceeds ($210,000 + $22,000 + $68,000 = $300,000) from sale of the securities to open a retail store under a 9-year franchise contract. What minimum annual net cash inflow must the store generate for Linda to earn a 7% return over the 9-year period? References Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2 Reg 3 Linda wants to use the $300,000 proceeds ($210,000 + $22,000 + $68,000 = $300,000) from sale of the securities to open a retail store under a 9-year franchise contract. What minimum annual net cash inflow must the store generate for Linda to earn a 7% return over the 9-year period? (Round your answer to the nearest whole dollar.) Minimum annual net cash inflow Ms Mc