White Way Stores Inc. _Decision to operate retail store

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On October 1, White Way 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 $180,000 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:
Required:
1. Prepare a differential analysis as of October 1, 2014, presenting the proposed operation of the store for the 16 years (Alternative 1) as compared with investing in U.S. Treasury bonds (Alternative 2). If an amount is zero, enter zero "0".
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2. Based on the results disclosed by
the differential analysis, should the proposal to operate the retail store be
accepted?
3. If the proposal is accepted, what
would be the total estimated income from operations of the store for the 16
years?
$

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Rating:
5/
Solution: White Way Stores Inc. _Decision to operate retail store