Linda Clark received $237,000 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 $120,000. The stock paid no dividends, but it was sold for $220,000 at the end of three years. b. Preferred stock was purchased at its par value of $45,000. The stock paid a 8% dividend (based on par value) each year for three years. At the end of three years, the stock was sold for $31,000. c. Bonds were purchased at a cost of $72,000. The bonds paid annual interest of $4,000. 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 15% return, and he gave Linda the following computations to support his statement: Common stock: Gain on sale ($220,000 $120,000) Preferred stock: Dividends paid (8% x $45,000 x 3 years) Loss on sale ($31,000 - $45,000) Bonds: Interest paid ($4,000 x 3 years) Gain on sale ($74,000 - $72,000) Net gain on all investments $ 100,000 10,800 (14,000) 12,000 2,000 $ 110,800 $110,800 3 years/$237,000 = 15.60 % Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using tables. Required: 1-a. Using a 15% discount rate, compute the net present value of each of the three investments. 1-b. On which investment(s) did Linda earn a 15% rate of return? 2. Considering all three investments together, did Linda earn a 15% rate of return? 3. Linda wants to use the $325,000 proceeds ($220,000+ $31,000+ $74,000 = $325,000) 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 12% return over the 9-year period?