On January 2, Fred Critchfield paid $18,000 for 900 shares of the common stock of Acme Company Mr Critchfield received an $0 80 per share dividend on the stock at the end of each year for four years At the end of four years, he sold the stock for $22,500 Mr Critchfield has a goal of earning a minim...

Years Amount of Cash Flows 12 Factor Present Value of Cash Flows Purchase of the stock ...

On January 2, Fred Critchfield paid $18,000 for 900 shares of the common stock of Acme Company.

Question:

On January 2, Fred Critchfield paid $18,000 for 900 shares of the of Acme Company. Mr. Critchfield received an $0.80 per share on the stock at the end of each year for four years. At the end of four years, he sold the stock for $22,500. Mr. Critchfield has a goal of earning a minimum return of 12% on all of his investments.
Required:
(Ignore income taxes.) Did Mr. Critchfield earn a 12% return on the stock? Use the method and the general format shown in Exhibit 14–4. Round all computations to the nearest whole dollar.

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