Differential analysis report involving opportunity costs
Five Star is considering leasing a building and buying the necessary equipment to operate a public warehouse. Alternatively, the company could use the funds to invest in $900.000 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:
Instructions
If the proposal is accepted, what is the total estimated operating income of the warehouse for the 15 years?
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