On July 1, Matrix Stores Inc. is considering leasing a building and buying the necessary equipment to operate a public warehouse. Alternatively, the company could use the funds to invest in $151,700 of 6% U.S. Treasury bonds that mature in 16 years. The bonds could be purchased at face value. The following data have been assembled:

Cost of store equipment		$151,700
Life of store equipment		16 years
Estimated residual value of store equipment		$18,300
Yearly costs to operate the warehouse, excluding depreciation of equipment
	depreciation of store equipment	$56,500
Yearly expected revenuesyears 1-8		74,700
Yearly expected revenuesyears 9-16		69,400

1. Prepare a differential analysis as 0?uly 1 presenting the proposed operation of the warehouse for the 16 years Alternative 1 as compared with investing in U S Treasury bonds (Alternative 2 enter "O". For those boxes in which you must enter subtracted or negative numbers use a minus sign. If an armount is zero Differential Analysis Operate Warehouse (Alt. 1) or Invest in Bonds (Alt. 2) Operate Warehouse (Alternative 1) Invest in Bonds(lternetive 2) Differential Effect on Income (Alternative 2) Revenues Costs Coets to operate warehouse Cost of equipment less residual value Income (Loss) 2. Based on the results disclosed by the differential analysis, should the proposal to operate a retail store be accepted? 3. If the proposal is accepted, what is the total estimated income from operations of the warehouse for the 16 years