Question: Exercise 14-10 (Algo) Net Present Value Analysis [LO14-2] Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of
Exercise 14-10 (Algo) Net Present Value Analysis [LO14-2] Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return she is earning. For example, three years ago she paid $18,000 for 920 shares of Malti Company's common stock. She received a cash dividend of $718 on the stock at the end of each year for three years. At the end of three years, she sold the stock for $21,000. Kathy would like to earn a return of at least 16% on all of her investments. She is not sure whether the Malti Company stock provides a 16% return and would like some help with the necessary computations. Click here to view and to determine the appropriate discount factor(s) using tables. Required: 1. Compute the net present value Kathy earned on her investment in Malti Company stock. 2. Did the Malti Company stock provide a 16% return? Complete this question by entering your answers in the tabs below. Compute the net present value Kathy earned on her investment in Malti Company stock. Note: Negative amounts should be indicated by a minus sign. Round your final answer to the nearest whole dollar amount
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