years. 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 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: $100,000 10,800 (14,000) Common stock Gain on sale (5220,000 - $120,000) Preferred stock Dividende paid (8 x 545,000 3 years) Loss on sale ($31.000 - $45,000) Bonds: Interest paid $4,000 3 years) Gain on sale ($74,000 $72,000) Net gain on all investments 12,000 2,000 $ 110.800 $110,800 = 3 years/$237,000 = 15.60 Click here to view Exhibit 148 1 and Exhibit 148 2. to determine the appropriate discount factor(s) using tables. Required: 1-a. Using a 15% discount rate, compute the not present value of each of the three investments 1-b. On which investment(s) did Lindo 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? 5 Complete this question by entering your answers in the tabs below. Req 1A Reg 18 Reg 2 Reg 3 Using a 15% 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 Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Req 2 Reg 3 On which investment(s) did Linda earn a 15% rate of return? (You may select more than one answer.) UL Common Stock Bonds Preferred Stock Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Reg 2 Req3 Considering all three investments together, did Linda earn a 15% rate of return? OYes 10 No Complete this question by entering your answers in the tabs below. Req 1A Req 18 Req 2 Req 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? (Round your answer to the nearest whole dollar.) Minimum annual net cash inflow EXHIBIT 14B-1 Present Value of $1:1 (1+r)n 96 139 6 NOSO MO Periods 4% 5% 6% 75 89 10% 11% 12% 145 15% 16% 17% 1 18% 197 20% 215 22 235 0.962 0.9520.9430.935 245 25 0926 0.917 0.909 0.901 0.893 0.885 0.877 0.870 0.862 0.855 0.847 0.840 0.833 0.826 0.8200.813 0.806 0.800 2 0.925 0.907 0.890) 0.873 0.8570.842 10.826 0812 0.797 0.783 1 0.769 3 0.756 0.743 0.731 0.7180.706 0.694 0.6830.672 0.661 0.650 0.640 0.889 0864 0.840 0.816 0.7940.772 0.751 0.731 0.712 0.693 0.675 0.658 0.641 0.6240.609 0.59305790.564 0.551 0.537 0.524 0.512 4 0.8550.823 0.792 0.763 0.735 0.708 0.6830.659 0.636 06130.592 0.572 0.5520.534 0.516 0.4990482 04670451 5 0.437 0.423 0,410 0822 0.784 0.747 0.713 0.681 0.650 0.621 0.593 0.567 0.543 0.519 0497 0476 0456 0437 0419 0,402 0.386 0.370 0.355 0.341 0.328 6 0.790 0.7460.705 0.6660.630 0.5960564 0.535 0.570480 0.456 0432 04100,390 0.370 0352 0.335 0.319 7 0.30 0.289 0.275 0.262 0.760 0.711 0.665 0.623 0.53 0.547 0.513 0.482 0.452 0.425 0.400 0.376 0.154 0.333 0.314 0.296 0.279 0.263 0.249 0235 0.222 0.210 0731 0.677 0.627 0.582 0.540 0.502 0467 043404040.376 0.351 0.3270305 0.2850.266 0.2490 233 0.218 0.204 0.191 0.179 0.16% 9 0.7030615 0.592 0.5440.500 D A 0424 0391 0,361 0.333 0.308 0.284 0.263 0.243 0.225 0.209 0.19 0.18 0.167 0.155 0.144 0,134 10 0676 0/6140558 0463 0422 06 0.352 0.322 0.295 0.220 0.247 0227 0208 0.191 0.76 0.1620.7490.137 0.126 0.116 0.107 11 0.6%) 035 0527 04250429 010 0.17 0.2870261 0237 0:275 0.195 0.17 0.1620.148 0.13 0.121 0.12 0.10210094 DONO 12 0.025 0444 0.397 0.356 03190.236 0.257 0231 0 20K 0.IN 0.160.152 0.13701240112 0.102002 OOR 0.0760009 13 0.001 0.530 04690415 0.36 0.326020025 0.220 0,204 0.1820.163 0.1450100116 0.100 0004 0.075 0.00 0051 DOSS 14 0577 0.505 0.4420388 0.340 0.299 0.263 0.232 0,205 0.181 0.160 0.141 0.125 0.111 0.009 0.08 0.078 0069 00620055009 0.014 15 0.555 0.4810417 0.362 0.315 0.275 0.299 0.209 0.183 0.10 0.1400.123 0.1080/095 0.04 0.074 0.065 0057 0.051 0.045 0.000 0.035 16 0.534 0,45% 0.394 0.239 0.292 0.252 0.218 0.18 0.163 0.1441 0.123 0.107 0.093 0.08 00710.062 0.054 0.017 002 00:16 0017 17 0.5130.436030103170.270 0.231 0.19 0.100.146 0.125 0.1080093 OOO 0000 0.000 0,052 0.045 0.039 0.034 0.030 0.023 18 0.494 04160.350 0.296 0.250 0.2120.180 0.153 0.130 0.111 0.095OONI 00690059OOSI 0,044 001 0033 0.02 0.024 0.021 0.DIB 19 0475 0.96 0.131 0.277 0.232 0.194 0.164 0.138 0.116 0.098 O 03 0.060 0.051 0.04300370011 0.027 0.025 0.020 0.0170014 0456 0372 0.312 0.25% 0.215 0.178 0.149 0.124 0.10400870073 0,061 0.043 0037 0.031 0.026 0.022 0.0190.016 0.014 0012 21 0439 0359 0.2940.242 0.199 0.166 0.135 0.112 0.093 0.077 0064 0.053 0.044 0,037 0.031 0.026 07220018 0.015 0.013 0.011 0.00 22 0422 0.342 0.278 0.226 0.184 0.150 0.123 0.101 0.083 0.068 0.056 0.046 0.038 0032 0.015 0013 | 0.0110.10 0.007 0.460.3260.262 0.211 0.100.13 0.112 0.091 0.0740.000 0.049 0.040 0.033 0.027 0.022 0.015 0.012 0010 0.0090.007 0.005 24 0-7900 3100147 0.197 0.158 0.126 0.1020.082 0.066 0.053 0.043 0.035 0.028 0.0230019 0.013 0.010 0.008 0.007 0.006 07005 25 0375 0.295 0233 0.184 0.1.46 0.116 0.092 0.074 0059 0047 0.038 0030 0.024 0.0200016 0.0130010 0.0090.007 0.006 0.005 0.004 LOPOLSSO ( PNDO SSD ZOO 0.026 OOO ISOD EL N100 TUTO 9200 RICO S100 TOLESTUTULUBUTUUTTUU TZUUTUU TUTULURULESUUUUUUUUUUUGLIULUVULLEN EXHIBIT 148-2 Present Value of an Annuity of $1 in Arrears, 11.1(1+r)! 58 581 SIZ 981 PP 1957DCOSESTESTSINS CO9 SOKOL LLOREN 1912 12 SEOTUL SE Periods 49 55 75 93 105 115 124 139 144 154 167 175 195 205 229 2018 245 25 1 0.962 09520963 0935 0.926 09170909090108930885 087708700862 055 0547 0.80 0.81308260 820 08130806 2 O SOO 1.886 1859 1833 180 1783 1.759 1.736 1.713 1690 1668 1647 1.626 1605 1.585 1566 1.5471528 1.509 1.4921474 1.457 1.440 3 2.775 2.72327673 2634 2.57725312487 2.444 2.40223612322 223 2246 2210 2.170 2100 2100 2074 2042 2011 1981 1952 4 3690354634653187 33123200 3.1703.10230372974291428552.798 2745 2620 2639 259 2.51 2494 2408 2:40M2.162 5 4452 14.329 4212 4.1009) JX90 3.791603517413352 3.2743.1993.127308 2.091 2,9262850 2303 2.745 2.689 6 5.242507649174.767 4.623 435542314.1139993.8893.78436535924812410126 33253.76730923.0202951 7 60025863325449320503343684712145644423 42 4160 4033922712253.805 3508 J416 322232423.161 8 67837616210 59715.147 5.535 551464.7994639447141444207 4078 1195058373736376195183,42132329 9 TA7,1036302153156247 599537999529151324946477246074451 4.0004163403133905 1786 3.6733566 1.461 10 17220 70246.7106418 6165340342625216601926894/00441924 1923079662570 11 4.327 4127-4015 3.9023.27616 12 314619245542151474 47934611 449784127 13 9.96 RS3.725 1918 SAT 2200 6.750 64M 6.122523532151047150304142420014050121 14 10 5651 999 9.293 224 A 62666625745295005 4024611423 4265108396222834 15 19712908 061 2062419160164626142386 335.32322337065315 16 1152 10 10.109443 BASI 327283473796.9746604626559545 5.455162149354780451643874189 4.00 3. 17 IZGLE 19,5912250224921200296372002 2001 2016 1059 1910 IN 256201206060612 SIT155305735033 **194249 4.08D 1119 120 119 10 904 395015290908506-39637235450163070 443 4613 44424263409350 20 DSC 12.462 01620103949218212911519 1796 269 270356633625939295.528 535.10467041676.00 EEN 4.1105 21 14 019 2521 11.750 TO R16 107 9292 59910357562 2.1026637631259735.665 $35.123459146754.5164.292 4.121 14451 13.163 170421106 TO 2019,402 3772 1.17627634541206703653596 5.69654109109 4.909 4.6 4.4 4100 41 3.90 23 1433 1340220311272 10371 067206292699606067235425.167 4925 24 15 2 13.299 1730 DO 10:5209.7071 353-34877154225303556.43360733575978515937431344507235391 25 50214094127831655 10.675981390722842227330687326.4666092.00 467 5.193 1984.7214314 26 1598315375 5805 1826 LOSE 9929 191614338987372 6908) 6.4932 5233 5.080323649564520 252 45284151198 WS TOUT ESIT THEEOTORIEVEDI TIST FOT QUE LEPIECIOR TOUT SZPIECE