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Differential Analysis involving Opportunity Cout On August 1, Rantou Stores Inc. is considering leasing a builng and purchasing the necessary equipment to operate a retail

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Differential Analysis involving Opportunity Cout On August 1, Rantou Stores Inc. is considering leasing a builng and purchasing the necessary equipment to operate a retail store. Alternatively, the company could use the funds to invest in $1,000,000 of 4 1.5. Trestury bonds that mature in 15 years. The boeds could be purchased at face value. The following dst have been assembled Cost of store equipment $1.000.000 Life of store equipment Estimated residual value of store equipment 550,000 Yearly costs to operate the store, excluding depreciation of store equipment $200,000 Yearly expected revenues-vaart 1-6 $300,000 Yearly expected tunes-vers 7-15 $400,000 Required: 1. Prepare a trential analysis an ot kugust : presenting the proposed operation of the store for the 15 years (alternative ?) as compared with investing in U.S. Treasury bonds Alternative 2), 1 an amount is zero, entro Differential Analysis Operate Retail (Alt. 1) or Invest in Bonds (Alt. 2) August 1 Operate Differential Retail Bonds Effects (Alternative }) (Alternative 2) (Alternative 2) Costs to 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

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