Business, 19.11.2019 02:31 ringo12384

On august 1, rantoul stores inc. 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 $1,000,000 of 4% u. s. treasury bonds that mature in 15 years. the bonds could be purchased at face value. the following data have been assembled: cost of store equipment $1,000,000life of store equipment 15 yearsestimated residual value of store equipment $50,000yearly costs to operate the store, excluding depreciation of store equipment $200,000yearly expected revenues—years 1–6 $300,000yearly expected revenues—years 7–15 $400,000required: 1. prepare a differential analysis as of august 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).

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On august 1, rantoul stores inc. is considering leasing a building and purchasing the necessary equi...