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Linda Clark recelved $229,000 from her mother's estate. She placed the funds into the hands of a broker, who purchased the following securities on Linda's

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Linda Clark recelved $229,000 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 $125,000. The stock paid no dividends, but it was sold for $210,000 at the end of three years. b. Preferred stock was purchased at its par value of $49,000. The stock paid a 7% dividend (based on par value) each year for three years. At the end of three years, the stock was sold for $35,000 c. Bonds were purchased at a cost of $55,000. The bonds paid annual interest of $1,000. After three years, the bonds were sold for $81,000 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 16% return, and he gave Linda the following computations to support his statement: ($110,290+3 years) $229.000=16.05% Click here to view Extibit 148.1 and to determine the appropriate discount factor(5) using tables. Required: 1-a. Using a 16% discount rate, compute the net present value of each of the three investments. 1.b. On which investment(s) did Linda earn a 16% rate of return? Required: 1-a. Using a 16% discount rate, compute the net present value of each of the three investments. 1-b. On which investment(s) did Linda earn a 16% rate of retum? 2. Considering all three investments together, did Linda earn a 16% rate of return? 3. Linda wants to use the $326,000 proceeds ($210,000+$35,000+$81,000=$326,000) from sale of the securities to open a r store under a 7 -year franchise contract. What minimum annual net cash inflow must the store generate for Linda to earn a 11% reth over the 7-year period? Complete this question by entering your answers in the tabs below. Using a 16% 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.)

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