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Differential Analysis Involving Opportunity Costs On October 1. Midway Distribution Company is considering leasing a building and purchasing the necessary equipment to operate a retail

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Differential Analysis Involving Opportunity Costs On October 1. Midway Distribution Company is considering leasing a building and purchasing the necessary equipment to operate a retail store. Alternatively, the compary could use the funds to invest in $149,500 of 6% U.S. Treasury bonds that mature in 16 years. The bonds could be purchased at face value. The following data have been ascembled: 1. Prepare a differential analysis as of October 1 to determine whether to Operate Retail Store (A)ternative 1) or Invest in Bonds (Arternative 2), If an amount is zero, enter zero "0". For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Differential Analysis Operate Retail Store (Alt, 1) or Invest in Bonds (Alt, 2) n-takar1 2. Based on the resuits disclosed by the differential analysis, should the proposal be accepted? 3. If the proposal is accepted, what would be the total estimated income from operations of the store for the 16 years? 5

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