On August $1,2023$ Coastal Distribution Company is considering leasing a building and buying the necessary equipment to operate a public warehouse. Assume the equipment will be sold for its residual value at the end of its useful life.

Alternatively, the company could use the funds to invest in $$740,000$ of $4\mathrm{.}0\%$ U$.$S$.$ Treasury bonds that mature in $14$ years. The bonds could be purchased at face value. The following data have been assembled:

$\backslash$table$[[$Equipment Categories,Amount$],[$Cost of equipment,$$740,000],[$Useful life of equipment,$14$ years$],[$Estimated residual value of equipment,$$75,000],[$Annual costs to operate warehouse, less depreciation,$$205,000],[$Annual straight$-$line depreciation,$$25,000],[$Annual expected revenues of years $1-7,$$$290,000],[$Annual expected revenues of years $8-14,$$$245,000]]$

a$.$ Prepare a differential analysis as of August $1$ presenting the proposed operation of the warehouse for the $14$ years $($Alternative $1)$ as compared with investing in U$.$S$.$ Treasury bonds $($Alternative $2).$

b$.$ Based on the results disclosed by the differential analysis, which option do you suggest for Coastal Distribution Company? Why?