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Linda Clark received $219,000 from her mother's estate. She placed the funds into the hands of a broker, who purchased the following securities on Linda's

image text in transcribed Linda Clark received $219,000 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 $96,000. The stock paid no dlvidends, but it was sold for $170,000 at the end of three years. b. Preferred stock was purchased at its par value of $48.000. The stock paid a 6% dividend (based on par value) each year for three years. At the end of three years, the stock was sold for $34,000. c. Bonds were purchased at a cost of $75,000. The bonds paid annual interest of $4,500. After three years, the bonds were sold for $77.000 The securitles were all sold at the end of three years so that Linda would have funds avallable to open a nev business venture. The broker stated that the Investments had earned more than a 12% return, and he gave Linda the following computations to support his statement: $84,1403 years $219,000=12.80% Click here to vlevi Fxhlblt 14B1 and to determine the appropriate discount factori(s) using tables. Required: 1-a. Using a 12\% discount rate, compute the net present value of each of the three investments. 1-b. On which investment(s) did Linda earn a 12% rate of return? 2. Considering all three investments together, did Linda earn a 12% rate of return? 3. Linda wants to use the $281,000 proceeds ($170,000+$34,000+$77,000=$281,000) from sale of the securitles to open a retall store under a 12-year franchlse contract. What minimum annual net cash inflow must the store generate for Linda to earn a 10\% return over the 12-year period? Complete this question by entering your answers in the tabs below. Using a 12% discount rate, compute the net present value of each of the three investments. (Enter negative amounts with a minus sign. Round computations to the nearest whole dollar.) On which investment(s) did Linda earn a 12% rate of return? (You may select more than one answer.) Bonds Preferred Stock Considering all three Investments together, did Linda earn a 12% rate of return? Linda wants to use the $281,000 proceeds ($170,000+$34,000+$77,000=$281,000) from sale of the securities to open a retail store under a 12 -year franchise contract. What minimum annual net cash inflow must the store generate for Linda to earn a 10% return over the 12 -year period? (Round your answer to the nearest whole dollar.) Linda Clark received $219,000 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 $96,000. The stock paid no dlvidends, but it was sold for $170,000 at the end of three years. b. Preferred stock was purchased at its par value of $48.000. The stock paid a 6% dividend (based on par value) each year for three years. At the end of three years, the stock was sold for $34,000. c. Bonds were purchased at a cost of $75,000. The bonds paid annual interest of $4,500. After three years, the bonds were sold for $77.000 The securitles were all sold at the end of three years so that Linda would have funds avallable to open a nev business venture. The broker stated that the Investments had earned more than a 12% return, and he gave Linda the following computations to support his statement: $84,1403 years $219,000=12.80% Click here to vlevi Fxhlblt 14B1 and to determine the appropriate discount factori(s) using tables. Required: 1-a. Using a 12\% discount rate, compute the net present value of each of the three investments. 1-b. On which investment(s) did Linda earn a 12% rate of return? 2. Considering all three investments together, did Linda earn a 12% rate of return? 3. Linda wants to use the $281,000 proceeds ($170,000+$34,000+$77,000=$281,000) from sale of the securitles to open a retall store under a 12-year franchlse contract. What minimum annual net cash inflow must the store generate for Linda to earn a 10\% return over the 12-year period? Complete this question by entering your answers in the tabs below. Using a 12% discount rate, compute the net present value of each of the three investments. (Enter negative amounts with a minus sign. Round computations to the nearest whole dollar.) On which investment(s) did Linda earn a 12% rate of return? (You may select more than one answer.) Bonds Preferred Stock Considering all three Investments together, did Linda earn a 12% rate of return? Linda wants to use the $281,000 proceeds ($170,000+$34,000+$77,000=$281,000) from sale of the securities to open a retail store under a 12 -year franchise contract. What minimum annual net cash inflow must the store generate for Linda to earn a 10% return over the 12 -year period? (Round your answer to the nearest whole dollar.)

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