Question

Sean Laarner paid $18,000 for 900 common shares of Acme Company on January 2, four years ago. Laarner received an $0.80 per share dividend on the shares at the end of each year for four years. At the end of four years, he sold the shares for $22,500. Laarner’s goal is to earn a mini- mum return of 12% on all of his investments.
Required:
Ignore income taxes. Did Laarner earn a 12% return on the shares? Use the net present value method and the general format shown in Exhibit 13–1. Round all computations to the nearest whole dollar.


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  • CreatedJuly 08, 2015
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