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Please help with the last question, #3. Thank you! Differential Analysis Involving Opportunity Costs On July 1, Campus Stores Inc. is considering leasing a building
Please help with the last question, #3. Thank you!
Differential Analysis Involving Opportunity Costs On July 1, Campus Stores Inc. is considering leasing a building and purchasing the necessary equipment to operate a retail store. Alternatively, the company coul use the funds to invest in $1,500,000 of 2% U.S. Treasury bonds that mature in 15 years. The bonds could be purchased at face value. The following data have been assembled: Required: 1. Prepare a differential analysis as of July 1 presenting the proposed operation of the store for the 15 years (Alternative 1 ) as compared with investing in U.S. Treasury bonds (Alternative 2). If an amount is zero, enter "0". If required, use a minus sign to indicate a loss. Feedback Check My Work 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 operating income of the store for the 15 years? X Feedback Theck My Work Subtract the operating costs and the cost of the equipment less the residual value from the revenues from operating the store. Determine the bond investment interest income for 15 years (principal rate time). Determine the differential effect on income of the revenues, costs, and profit (loss) by subtracting alternative 2 from alternative 1 . Which alternative has the most desirable effect on income
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