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need help! thank you in advance! Linda Clark received $221,000 from her mother's estate. She placed the funds into the hands of a broker, who
need help! thank you in advance!
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 $ 80,000 Common stock Gain on sale ($190,000 - $110,000) Preferred stock: Dividends paid (41 X $42,000 X 3 years) Loss on sale ($28,000 - $42,000) Bonds: Interest paid ($3,000 X 3 years) Gain on sale ($74,000 - $69,000) Net gain on all investments 5,040 (14,000) 9,000 5,000 $ 85,040 $85,040 + 3 years $221,000 - 12.804 na talas 4 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 reta 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? eBook Print Complete this question by entering your answers in the tabs below. Reg 1A Reg 10 Reg 2 Reg 3 Using a 12% 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 RogA Req 18 > 4 Click here to view Exhibit 128-1 and Exhibit 128 2. to determine the appropriate discount factors) using tables BOOK Required: 1-a. Using a 12% discount rate, compute the net present value of each of the three investments. 1-b. On which investments) 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 + 528,000 - $74.000 = $292,000) from sale of the securities to open a retall 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? Print Complete this question by entering your answers in the tabs below. Reg 1A Req 16 Reg 2 Req3 On which investment(s) did Linda carn a 12% rate of retum? (Select all that apply.) Common Stock Bonds Preferred Stock Book Print 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? Complete this question by entering your answers in the tabs below. Reg 1A Req 18 Reg 2 Req3 Considering all three investments together, did Linda earn a 12% rate of retur? Yes ONO Click here to view Exhibit 128-1 and Exhibit 128.2. 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? Complete this question by entering your answers in the tabs below. Reg 1A Reg 1B Reg 2 Reg 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? (Round your answer to the nearest whole dollar.) Minimum annual no cash inflow Step by Step Solution
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