Differential Analysis Involving Opportunity Costs $2\%$ U$.$S$.$ Treasury bonds that mature in $15$ years. The bonds could be purchased at face value. The following data have been assembled:

Cost of store equipment

Life of store equipment

Estimated residual value of store equipment

Yearly costs to operate the store, excluding depreciation of store equipment

Yearly expected revenues$-$years $1-6$

Yearly expected revenues$-$years $7-15$

$$1,500,000$

$15$ years

$$75,000$

$$320,000$

$$400,000$

$$600,000$

Required: is zero, enter $"0".$ If required, use a minus sign to indicate a loss.

Differential Analysis

Operate Retail Store $($Alt$.1)$ or Invest in Bonds $($Alt$.2)$

July $1$

Line Item Description

Revenues

Costs:

Costs to operate store

cost of equipment less residual value

Profit $($loss$)$

Operate Retail Store Invest in Bonds Differential Effects

$($Alternative $1)($Alternative $2)($Alternative $2)$

$

$2.$ Based on the results disclosed by the differential analysis, should the proposal be accepted?

$3.$ If the proposal is accepted, what would be the total estimated operating income of the store for the $15$ years?

$