On October $1,$ Midway Distribution Company 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 $$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

assembled:

Cost of store equipment

Life of store equipment

Estimated residual value of store equipment

Yearly costs to operate the store, excluding

depreciation of store equipment

Yearly expected revenues$-$years $1-8$

Yearly expected revenues$-$years $9-16$

Required:

$$149,500$

$16$ years

$$18,100$

$$56,700$

$$74,900$

$$70,500$

Prepare a differential analysis as of October $1$ to determine whether to Operate Retail Store $($Alternative $1)$ or Invest in Bonds $($Alternative $2).$ 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

Operate Retail Store $($Alt$.1)$ or Invest in Bonds $($Alt$.2)$

October $1$

Based on the results disclosed by the differential analysis, should the proposal be accepted?

If the proposal is accepted, what would be the total estimated income from operations of the store for the $16$ years?

$