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On October 1, White Way Stores Inc is considereg toming a building and purchasing the necessary equipment to operate a retad stone Alternativey the company
On October 1, White Way Stores Inc is considereg toming a building and purchasing the necessary equipment to operate a retad stone Alternativey the company could use the funds to went in 168.000 af en US Treasury bonds that mature 16 years. The bonds could be punctares at face vatre. The following data have been assembled $158.000 16 years $12.800 Cost of store equipment Life of store equipment Estimated residual value of store equipment Yearly costs to operate the store excluding depreciabon of store equipment Yewly expected seven years Yearly expected revenues-yeans 1-16 2015 500.000 574.300 Operate Retail Store (Alternative 1) or Invest in Bonds (Alternative 2) October 1 Invest in Bonds Operate Retail Store (Alternative 1) Differential Effect on Income 1 2 (Alternative 2) (Alternative 2) 5 Revenues + Costs: 0.00 5 6 Costs to operate store Cost of equipment less residual value 7 Income (loss) 0.00
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