Differential analysis involving opportunity costs Instructions Label and Amount Descriptions Differential Analysis Final Curstions Instructions On August 1, Partoul Stores Inc. is considering leasing a bulding and purchasing the necessary equipment to operateralstore. Aratively, the company could use the funds to invest in $158.000 of US Treasury bonds that mature in 16 years. The bonds could be purchased at the Val The following dat have been able Cost of forement Ule of store opment Estimated residual value of store equipment Yearly costs to operate the more excluding depreciation of some qument Yearly expected revenues-years 1-0 Yearly expected revers -10 $158.000 16 years $12.000 102,005 3.300 374.300 Required: 1. Prepare a dorit analysis as of Appresent the proposed operation of the store for the 18 years (Alternative 1) as compared with investing in U.S. Teasury bonds (Alternative ?). Refer to the list of Label and Amount Descriptions for the exact wording of the answer choices for at entries. For those bones in which you must enter subtracted or negative number wa a meus sign tha no amount or amount is no Acolon () will automatically appear it required 2 Based on the results disclosed by the internal analysis should the proposal be accepted 3. The proposals accepted, what would be the total estimated income from operations of the store for the 18 years Next > Differential analysis involving opportunity costs Instructions Labels and Amount Descriptions Differential Analysis Final Questions Labels and Amount Descriptions Labels Cash flows from investing activities Costs Amount Descriptions Costs to operate store Cost of equipment les residual value Gain on sale of investments Income loss) Loss on sale of investments Revenues Not) Instructions Label and Amount Descriptions Differential Analysis Final Questions Differential Analysis 1. Prepare a internal analysis as of August presenting the proposed operation of the store for the 15 years (Alematve 17 compared with noting in US Treasury bonds Alternative Refer to the list of Label and Amount Decoration for the wording of the choice for more in which you must endor negative numbers use there is not an artister Anwil omtaly Der Analyse Operate Retail Store (Alternative 1) o invested in US Treasury Bonds (Atemtve 3) Augusti Operate Retail Invested in us Differential Store Treasury Bonds Effect on com (Alternative 1) (Alternative) Alternative 2) 4 tabel Next Instructions Labels and Amount Descriptions Differential Analysis Final Questions Final Questions 2. Based on the results disclosed by the differential analysis, should the proposal be accepted? The company is indifferent since the result is the same regardless of which alternative is chosen Yes No 3. If the proposal is accepted, what would be the total estimated income from operations of the store for the 16 years
