Linda Clark received $245,000 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 $130,000. The stock paid no dividends, but it was sold for $220,000 at the end of three years 6. Preferred stock was purchased at its par value of $44,000. 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 $30,000 c Bonds were purchased at a cost of $71,000. The bonds paid annual Interest of $3,500. After three years, the bonds were sold for $73,000 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 13% return, and he gave Linda the following computations to support his statement Connon stock: Gain on sale (5220,000 - $150,000) Preferred stock! Dividends paid (544.000 3 years) Loss on sale ($30,000 - $44,000) Bonds Interest paid (53,500 years) Gain on sale (573,000 - $71.000) Net in on all investments $ 90,000 7.920 (14,000 10.500 2.000 $ 96,420 $96.420 + 3 years $245,000 = 13.10 % 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 13% discount rate, compute the net present value of each of the three Investments. 1-b on which investment(s) did Linda earn a 13% rate of return? 2. Considering all three investments together, did Linda earn a 13% rate of return? 3. Linda wants to use the $323,000 proceeds ($220,000 $30,000 + $73.000 = $323,000) from sale of the securities to open a retail store under a 8.year franchise contract. What minimum annual net cash inflow must the store generate for Linda to earn a 11% return over the 8-year period? Complete DOISIT 140-1 Precent Value of State Perloos Vw wa wa SEZ SC 2 3 4 93 12 Us 153 12 203 2 222 2013 0962 0952 090 0935 0926 0.90 0.9090901 0393 085 0877 0.870 0.002 0.55 0.847 03400333 0.025 0.020 000 0.000 0.000 0925 0907 0990 0.873 0857 0.142 0.025 0.0172 0.797 0.783 0.7690 756 0730731 0718 0.706 0.091 088 0672 0661 0650 06-10 09890884 0340 0.14 074072 071 0731 07120693 06750658 0641 0624 0609 0.53 0.579 0564 0.551 0537 0.524 0512 0.89 0823 072 0763 0735 0708 0583 065 0636 0613 059205720552 0534 055 0.499 0.432 0.467 04510070022 0.40 0022 074 07070 061 060 0621 05900567 050 059 0.42 0.476 0.56 0.437 049 0402 0386 0.370 0355 0.4 0.328 0.7900346 0705 066 0630 0506 0564 055 0507 0430 0456 0232 04100290 0.370 0352 0.250.300.303 0289 0275 0.202 5 2 OLZA TO SECO CO COCO ITO SOMEO DEO ISO 900OVO SVO 250 200 000 SO 1290 1990 120 DUO GUD 9910 5 OL ML 0.71 0.677 0.62 0.582 0.50 0.502 0.467 0.04 0.404 0.376 0351 0.322 0.305 0289 0.266 0249 0271 0.20 0.2040191 6.708 96454982054 0.500 02 0424 099 0.361 0333 03080284 0263 0243 0225 0709 0194 0100161 01550144 034 06700050 0.500 0.13 0422 0300 0.3520 0295 020 026 0227 008 0.101 0176020907 0.0260116 0107 0.00 0.527 07042060360 0.37 026 0201 02 0215000362 034 035 0.012 0.00 0.00 0.006 06250157 00 00 00 0.356 0:00206 0257 0271 0300 010700152 072002012002200000 OB 0.55 0.000326 02900256 027 0204 02 03600345 000 00004 0000 0.05 0.0% 0.00 0.00 0.055 050000000003100202000222 0205 00010 0125 00090 0.00 0.000 0.00 0.005 000 00H 0.0004170502 0.30 029 0201 00010123 000 000 0004 003 005 0057 004 0.04500408035 om 010 0003 0.00100700020054 000 000 000 000 000 LOLO 11 15 RODO O TO COMO HOLO COO OO OOO OOO SD 100 000 000 0000 0000 0000 0000D TO DO COMEDYOOGO HD 00 00 OO OO OOO OOO 160 ODOWOSO OOO NOWOWO POLO SD O ODOSLOUCHOV TO 000000000000000000000000000OOOO See 000 000 0000 0000 0091 004 003 002 0.020 00 00 00 0000100000000051 000 007 008 007 003 000 000 000 00040 O 001 000 000 000 000 000 0002 Bow N 000 011 000100 0001 GA0603 001 0.000 0.00 0.000000 000 001 000 000 000 000 0002 006 002 cow 000 on 0.000000 0.00022 021 000 000 0.000100010000000 boots 0 00 00 00 000 000 000 000 000 000 000 0097 004 00000000000000000000000000000004 0000000000000000000000 2010 0000000000000000000000000000000000000000 om 0000000000000000000000000000000000000000000000000 00000000000022000 out on 00000000000000000000 000000000000000000000000000000000000000 000 000 000 000 000 000 000 000 0000 0000 000 000 DOO 000000000OOOD 900 00 00 00 DO NO DONIT MBS tem Vse en uity of S1 in Armenia V 3 25 Z SEZO EX SS 0000 8000 92001330 00 00 SSD 2900 00050 0600 10505050 6501 3 7 ORCE OUE 5 ACE WE 0 00 29 CE IZ DE 260129 SIZE RECONE 6SESDEFE ORE 100 155 ton 09020952000925020099 1998 1997 00 1700 738 170 1000 1660 1667 1826 1805 150 1508 150 1520 1509 1492 1474 S 1400 2775 272 253 254 2577 2531 2.487 2.4442402 2361 2322 223 224 2210 2114 2140 200 201 2012 2011 1981 1952 3102 3037 2974 294 2055 2.796 274 2090 269 2.519 2540 2494 243 244 2.300 4452 42 420 2.999 2000 27913696 1605 350 3433 3352 3234 1199 3127 30502.991 2925 2066 2007 2.745 2.609 5202507049 002 576 5510 5200 50 450 470 4554 4421 4200 4500 40.9 1922 192 37063605 3.500 340 122 122 316 6620 597 530 5535 5205 55 94799 40094433 434 4207 4078 3954 3 3726 1029 15 2424 1729 53 57555512 528 524946477246074151014163 2001 1905 37067671566 140 7222 1700 7024 65560 5050 5420 5216 SW 433 434 4341924054 2933 2799 160 157 300757 6309 250 7536 7101 490 479241 404277407 1955 1954 175 2004 7407 710) 7500424 632 552 550 251 190 550 45000 453 390 3700 230 60126601 602 6002 574 5.60 5.223 5.000 240 5 104265991504 1.500 7606 400 SCHE OS SOS OL 14 Y SUS cestoy EET 99 907 SOS ZS S S 29 590999 GER JE GOON PONESES SOS SOCO TESCO w 1965 99 101 NOW WE TL CO DE OF G C LED wow 2007 1001 DCT VOLVO YOLL OS CO CROT OSLO ES5592COLL 1192 COLE WE91000 S SS HOST 30 OS 00006 HET SY BEL 1001 w 010 SCHEDE HET Son HE FOTOS WEDO CHOOL 06 Voor COSTOSOS ID000000 ES stotis 102 E 1.022 754 TOO 7206554055 222 49075 201 202250 640 65 534 525 40 330690150 SS S000 4 3954 4675422401 0 m 505050 307230 2230 GOSSOS 2010 2005 66 67 68 1054 BON SAD 544 23 out 7556 554 To