Linda Clark received $286,000 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 $156,000. The stock paid no dividends, but it was sold for $280,000 at the end of three years. b. Preferred stock was purchased at its par value of $48,000. 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 $20,000. c. Bonds were purchased at a cost of $82,000. The bonds paid annual interest of $3,500. After three years, the bonds were sold for $87,000. 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 14% return, and he gave Linda the following computations to support his statement: $ 124,000 Common stock: Gain on sale ($280,000 - $156,000) Preferred stock: Dividends paid (8% * $48,000 x 3 years) Loss on sale ($20,000 - $48,000) Bonds: Interest paid ($3,500 x 3 years) Gain on sale ($87,000 - $82,000) Net gain on all investments 11,520 (28,000) 10,500 5,000 $ 123,020 $123,020 = 3 years/$286,000 = 14.30 % 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 14% discount rate, compute the net present value of each of the three investments. 1-b. On which investment(s) did Linda earn a 14% rate of return? 2. Considering all three investments together, did Linda earn a 14% rate of return? 3. Linda wants to use the $387,000 proceeds ($280,000 + $20,000 + $87,000 = $387,000) from sale of the securities to open a retail store under a 7-year franchise contract. What minimum annual net cash inflow must the store generate for Linda to earn a 12% return over the 7-year period? Reg 1A Reg 1B Reg 2 Reg 3 Using a 14% 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.) Net present value Common stock Preferred stock Bonds Req 1A Reg 1B Reg 2 Reg 3 On which investment(s) did Linda earn a 14% rate of return? (You may select more than one answer.) Common Stock Bonds Preferred Stock Reg 1A Reg 1B Reg 2 Req3 Considering all three investments together, did Linda earn a 14% rate of return? OYes Ono Req 1A Reg 1B Reg 2 Req3 Linda wants to use the $387,000 proceeds ($280,000 + $20,000 + $87,000 = $387,000) from sale of the securities to open a retail store under a 7-year franchise contract. What minimum annual net cash inflow must the store generate for Linda to earn a 12% return over the 7-year period? (Round your answer to the nearest whole dollar.) Minimum annual net cash inflow