Chapter 25, Problem 25.1BPR

a)

To determine

Opportunity Cost: Opportunity cost refers to the forgone revenue which could have been generated through an alternative use of the assets.

Differential Analysis: Differential analysis refers to the analysis of differential revenue that could be gained or differential cost that could be incurred from the available alternative options of business

To Prepare: The differential analysis of Company CD as on July 1, for given alternatives.

b)

To determine

To Deicide: The proposal to be accepted on the basis of differential analysis.

c)

To determine

To Calculate: The total estimated income from the operation of warehouse for 14 years.