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Linda Clark received $ 1 8 8 , 0 0 0 from her mother's estate. She placed the funds into the hands of a broker,
Linda Clark received $ 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 $ The stock paid no dividends, but it was sold for $ at the end of three years. b Preferred stock was purchased at its par value of $ The stock paid a dividend based on par value each year for three years. At the end of three years, the stock was sold for $ c Bonds were purchased at a cost of $ The bonds paid annual interest of $ After three years, the bonds were sold for $ 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 return, and he gave Linda the following computations to support his statement:Required:a Using a discount rate, compute the net present value of each of the three investmentsb On which investments did Linda earn a rate of return? Considering all three investments together, did linda earn a rate of return? Linda wants to use the $ proceeds $$ $ $ from sale of the securities to open a retail store under a year franchise contract. What minimum annual net cash inflow must the store generate for linda to earn a return over the year period? Note: there was already an available solution to this, however, it was incorrect
Linda Clark received $ from her mother's estate. She placed the funds into the hands of a broker, who purchased the following securities on Linda's behalf:
a Common stock was purchased at a cost of $ The stock paid no dividends, but it was sold for $ at the end of three years.
b Preferred stock was purchased at its par value of $ The stock paid a dividend based on par value each year for three years. At the end of three years, the stock was sold for $
c Bonds were purchased at a cost of $ The bonds paid annual interest of $ After three years, the bonds were sold for $
The securities were all sold at the end of three years so that Linda would have funds available to open a new business venture. The broker stated that the investments had earned more than a return, and he gave Linda the following computations to support his statement:Required:a Using a discount rate, compute the net present value of each of the three investmentsb On which investments did Linda earn a rate of return?
Considering all three investments together, did linda earn a rate of return?
Linda wants to use the $ proceeds $$ $ $ from sale of the securities to open a retail store under a year franchise contract. What minimum annual net cash inflow must the store generate for linda to earn a return over the year period?
Note: there was already an available solution to this, however, it was incorrect
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