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Diferential Analysis involving Opportunity Costs On July 1, Coastal Distribution Company is considering leasing a building and buying the necessary equipment to operate a public

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Diferential Analysis involving Opportunity Costs On July 1, Coastal Distribution Company is considering leasing a building and buying the necessary equipment to operate a public warehouse Alternatively, the company could use the funds to invest in $740.000 of 5% U.S. Treasury bonds that mature in 14 years. The bonds could be purchased at face value. The following data have been assembled Cost of store equipment $740,000 Life of store equipment Estimated residual value of store equipment $75.000 Yearly costs to operate the warehouse excluding depreciation of store equipment $175.000 Yearly expected revenue-years 1-7 $280,000 Yearly expected revenues-years 8-14 $240.000 Required: bonde 1. Prepare a differential analysis as of July 1 presenting the proposed operation of the house for the 14 years Alternativ as compared with investing in U.S. They Abernative 2). fon amount is e nter". For those in which you must be turated or negatvember minus sign Differential Analysis Operate Warehouse (At. 1) or Invest in Bonds (At. 2) July 1 2. Based on the results disclosed by the differential analysis, should the proposal to operate the warehouse be accepted? 3. If the proposal is accepted, what is the total estimated income from operations of the warehouse for the 14 years

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