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Complete 1,2 and 3 Differential Analysis Involving Opportunity Costs On July 1, Coastal Distribution Company is considering leasing a buliding and buying the necessary equipment
Complete 1,2 and 3
Differential Analysis Involving Opportunity Costs On July 1, Coastal Distribution Company is considering leasing a buliding and buying the necessary equipment to operate a public warehouse. Alternatively, the company could use the funds to invest in $151,900 of 5% U.S. Treasury bonds that mature in 16 years. The bonds could be purchased at face value. The following data have been assembled: Required: 1. Prepare a differential analysis as of July 1 presenting the proposed operation of the warehouse for the 16 years (Alternative 1 ) as compared with investing in U.S. Treasury bonds (Aiternative 2). If an amount is zero, enter " 0 ", If required, use a minus sign to indicate lase. 2. Based on the resuits disclosed by the differential analysis, should the proposal be accepted? 3. If the proposal is accepted, what is the total estimated operating income of the warehouse for 16 years Step by Step Solution
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