Homework Chapter 25 eBook Calculator 1. EX.25.03.ALGO Differential Analysis involving Opportunity Costs 2. PR. 25.01A On August 1, Rantoul Stores Inc. is considering leasing a building 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% U.S. Treasury bonds that mature in 15 years. The bonds could be purchased at face value. The following data have been assembled: 3. PR 25.02A 4. PR.25.03A Cost of store equipment ufe of store equipment $1,000,000 15 years $50,000 5. PR.25.04A Estimated residual value of store equipment 6. PR 25.05A Yearly costs to operate the store, excluding 7. PR.25.06A depreciation of store equipment Yearly expected revenues-Years 1-6 Yearly expected revenues-Years 7-15 $200,000 $300,000 $400,000 Required: 1. Prepare a different analysis of Augustprisenting the proposed operation of the store for the 15 years (Alternative 1) as compared with investing in US Treasury bonds (Alternative 2). If an amount is zero, enter"0" als Operate Reta (At. 1) or Invest in Bands (Alt. 2) Retail Bonds ative 1) (Alternative 2) (Alternative 2) Check My Work Previous Next > 2060@@WPX COGU RESUME HIGHLIGHTS Yearly expected reverseas U UUUU Required: 1. Prepare a differential analysis as of August 1 presenting the proposed operation of the store for the 15 years (Alternative 1) as compared with investing in U.S. Treasury bonds (Alternative 2). If an amount is zero, enter "o". Differential Analysis Operate Retail (Alt. 1) or Invest in Bonds (Alt 2) August 1 Operate Invest in Differential Retail Bonds Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues Costs to operate store Cost of qument a l Proft (loss) Subtract the operate coats (15 years) and the cost of the equipment was the residual value from the revenues from operating the operate. Determine the band investment interest income for is oars (principal rate time). Determine the differential et on income of the revenues, costs and prot s) by subtracting motive from teative 1. which alternative has the most desirable tect on income? ( Previous Next RESUME HIGHLIGHTS 913 209 O WC? X COC