Business, 02.04.2020 03:18 jimmy8816

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: cost of store equipment $180,000 life of store equipment 16 years estimated residual value of store equipment $15,000 yearly costs to operate the store, excluding depreciation of store equipment $58,000 yearly expected revenues - years 1-8 $85,000 yearly expected revenues - years 9-16 $73,000

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 us treasury bonds (alternative 2)

2. based on the results disclosed by the differential analysis should the proposal be accespted?

3. if the proposal is accepted what would be the total estimated income from operations of the store for the 16 years?

Answers: 3

Show answers

Another question on Business

Business, 22.06.2019 10:40

What would happen to the equilibrium price and quantity of lattés if the cost to produce steamed milk

Answers: 1

Answer

Business, 22.06.2019 20:20

This activity is important because as a marketing manager, you must allocate resources to reach your target market. during the strategic marketing process, managers move through three important phases to determine how to optimally allocate resources: a planning phase, an implementation phase, and an evaluation phase. in this interactive exercise, you are asked to review various strategic marketing actions and determine where in the strategic marketing process the action would occur. the goal of this exercise is to demonstrate your understanding of the strategic marketing process and related marketing actions.

Answers: 2

Answer

Business, 22.06.2019 20:30

Afirm wants to strengthen its financial position. which of the following actions would increase its current ratio? a. reduce the company's days' sales outstanding to the industry average and use the resulting cash savings to purchase plant and equipment.b. use cash to repurchase some of the company's own stock.c. borrow using short-term debt and use the proceeds to repay debt that has a maturity of more than one year.d. issue new stock, then use some of the proceeds to purchase additional inventory and hold the remainder as cash.e. use cash to increase inventory holdings.

Answers: 3

Answer

Business, 22.06.2019 23:20

Nnette henri is paid an hourly wage of $8.90 for a 32-hour workweek of 4 days, 8 hours daily. for any work on the fifth day and on saturdays, she is paid one and one-half times her regular hourly rate. during a certain week, in addition to her regular 32 hours, henri worked 6 hours on the fifth day and 5 hours on saturday. for this workweek, henri’s total earnings are:

Answers: 1

Answer

You know the right answer?

On october 1 white way stores inc is considering leasing a building and purchasing the necessary equ...

Questions