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 dividends, 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 $72000. 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 12% return, and he gave Linda the following computations to support his statement: Common stock: Gain on sale ($170,090 - $96,080) $ 74,909 Preferred stock: Dividends paid (6% x 548,060 * 3 years) 8,640 Loss on sale ($34,000 - $48,808) (14,090) Bonds : Interest paid ($4, 500 x 3 years) 13,500 Gain on sale ($77,600 - $75,008) 2,600 Net gain on all investments $ 84, 140 $84,140 + 3 years/$219,000 = 12.80 % Click here to view Exhibit 148-1 and Exhibit 148-2, to determine the appropriate discount factor(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 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? Complete this question by entering your answers in the tabs below. Req 14 Req 1B Req 2 Reg 3 Using a 12% discount rate, compute the not present value of each of the three investments. (Enter negative amounts with a minus sign. Round computations to the nearest whole dollar.) Net present valu Common stock Preferred stock Bonds Req 1A Req 1B Reg 2 Req 3 On which investment(s) did Linda earn a 12% rate of return? (You may select more than one answer.) Common Stock Bond Preferred Stock Req 1A Req 1B Req 2 Req 3 Considering all three Investments together, did Linda earn a 12% rate of return? Yes OND Req 1A Req 18 Reg 2 Reg 3 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.) Minimum annual net cash inflowKent Duncan Is exploring the possibility of opening a self-service car wash and operating It for the next five years until he retires. He has gathered the following information: a. A building in which a car wash could be installed is available under a five-year lease at a cost of $4,100 per month. b. Purchase and installation costs of equipment would total $305,000. In five years the equipment could be sold for about 10% of its original cost. C. An investment of an additional $5,000 would be required to cover working capital needs for cleaning supplies, change funds, and so forth. After five years, this working capital would be released for investment elsewhere. d. Both a wash and a vacuum service would be offered. Each customer would pay $1.35 for a wash and $.70 for access to a vacuum cleaner. e. The only variable costs associated with the operation would be 7.5 cents per wash for water and 10 cents per use of the vacuum for electricity. f. In addition to rent, monthly costs of operation would be: cleaning. $2,600; insurance, $75; and maintenance, $1,825. g. Gross receipts from the wash would be about $2,700 per week. According to the experience of other car washes, 60% of the customers using the wash would also use the vacuum. Mr. Duncan will not open the car wash unless it provides at least a 12% retum. Click here to view Exhibit 148 1 and Exhibit 148 2, to determine the appropriate discount factor(s) using tables. Required: 1. Assuming that the car wash will be open 52 weeks a year, compute the expected annual net cash receipts from Its operation. 2-a. What is the net present value of the investment in the car wash? 2-b. Would you advise Mr. Duncan to open the car wash? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 26 Assuming that the car wash will be open 52 weeks a year, compute the expected annual net cash receipts from its operation. Auto wash cash receipts Vacuum cash receipts Total cash receipts Less cash disbursements Water Electricity Rent Cleaning Insurance Maintenance Total cash disbursements Annual net cash receipts from operations Req 1 Req 2A Req 20 What is the net present value of the investment in the car wash? (Enter negative amount with a minus sign. Round your final answer to the nearest whole dollar amount.) Net present value Reg 1 Req 2A Req 20 Would you advise Mr. Duncan to open the car wash? OYes ONO