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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
EXERCISE 13–15 Basic Net Present Value Analysis [LO1]
On January 2, Fred Critchfield paid $18,000 for 900 shares of the common stock of Acme Com- pany. 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 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 net present value method and the general format shown in Exhibit 13–4. Round all computations to the nearest whole dollar.
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