1. On August 1, Rantoul Stores Inc. is considering leasing a building and purchasing the necessary equipment to operate a retail store. Alternatively, the company could use the funds to invest in $900,000 of 3% U.S. Treasury bonds that mature in 15 years. The bonds could be purchased at face value. The following data have been assembled: Amount $900,000 15 years Revenues/costs Cost of store equipment Life of store equipment Estimated residual value of equipment Annual store operating costs less depreciation Annual expected revenues in years 1-6 Annual expected revenues in years 7-15 $45,000 200,000 250,000 300,000 Problem 1 Instructions a. Prepare a differential analysis as of August 1 presenting the proposed operation of the store for the 15 years (Alternative 1) as compared with investing in U.S. Treasury bonds (Alternative 2). b. Based on the results disclosed by the differential analysis, should the proposal be accepted? c. If the proposal is accepted, what would be the total estimated income from operations of the store for the 15 years? 1. On August 1, Rantoul Stores Inc. is considering leasing a building and purchasing the necessary equipment to operate a retail store. Alternatively, the company could use the funds to invest in $900,000 of 3% U.S. Treasury bonds that mature in 15 years. The bonds could be purchased at face value. The following data have been assembled: Amount $900,000 15 years Revenues/costs Cost of store equipment Life of store equipment Estimated residual value of equipment Annual store operating costs less depreciation Annual expected revenues in years 1-6 Annual expected revenues in years 7-15 $45,000 200,000 250,000 300,000 Problem 1 Instructions a. Prepare a differential analysis as of August 1 presenting the proposed operation of the store for the 15 years (Alternative 1) as compared with investing in U.S. Treasury bonds (Alternative 2). b. Based on the results disclosed by the differential analysis, should the proposal be accepted? c. If the proposal is accepted, what would be the total estimated income from operations of the store for the 15 years