Linda Clark received $221,000 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 $110,000. The stock paid no dividends, but it was sold for $190,000 at the end of three years. b. Preferred stock was purchased at its par value of $42,000. The stock paid a 4% dividend (based on par value) each year for three years. At the end of three years, the stock was sold for $28,000. c. Bonds were purchased at a cost of $69,000. The bonds paid annual interest of $3,000. After three years, the bonds were sold for $74,000. 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 ($190,000 $110,000) Preferred stocki Dividends paid (4% x $42,000 3 years). Loss on sale ($28,000 Bonds: Interest paid ($3,000 Gain on sale ($74,000 $42,000) 3 years) $69,000) Net gain on all investments $85,040 + 3 years/$221,000 = 12.80 % $ 80,000 5,040 (14,000) 9,000 5,000 $ 85,040 Click here to view Exhibit 14B-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 $292,000 proceeds ($190,000 +$28,000+ $74,000 $292,000) 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 9% return over the 12-year period?