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 $148,500 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		$148,500
Life of store equipment		16 years
Estimated residual value of store equipment		$18,000
Yearly costs to operate the store, excluding
	depreciation of store equipment	$56,600
Yearly expected revenuesyears 1-8		$74,600
Yearly expected revenuesyears 9-16		$70,000

Required:

1. 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
	Operate Retail Store (Alternative 1)	Invest in Bonds (Alternative 2)	Differential Effects (Alternative 2)
Revenues	$fill in the blank 605fb7076079f97_1	$fill in the blank 605fb7076079f97_2	$fill in the blank 605fb7076079f97_3
Costs:
Costs to operate store	fill in the blank 605fb7076079f97_4	fill in the blank 605fb7076079f97_5	fill in the blank 605fb7076079f97_6
Cost of equipment less residual value	fill in the blank 605fb7076079f97_7	fill in the blank 605fb7076079f97_8	fill in the blank 605fb7076079f97_9
Profit (loss)	$fill in the blank 605fb7076079f97_10	$fill in the blank 605fb7076079f97_11	$fill in the blank 605fb7076079f97_12

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 income from operations of the store for the 16 years?