Invest us treasury 151600

rate 6%
cost 151600
life 16
residual value 17400
yearly costs 56500
revenue
1-7 74600 8
8-14 70400 8
Ques 1
Proposal to Operate Warehouse
1-Jul-18

Differential revenue from alternatives:

Revenue from operating warehouse 1160000 (74600*8+70400*8)
Revenue from investment in bonds 145536 (151600*6%*16)
Differential revenue from operating warehouse 1014464
Differential cost of alternatives:
Costs to operate warehouse 904000 (56500*16)
Cost of equipment less residual value 134200 (151600-17400)
Differential cost of operating warehouse 1038200
Differential income from operating warehouse -23736

Ques 2
reject the case since differential income is negative

Ques 3
Total estimated revenue from operating warehouse 1160000
Total estimated expenses to operate warehouse:
Costs to operate warehouse, excluding depreciation 904000
Cost of equipment less residual value 134200 1038200
Total estimated income from operating warehouse 121800

Or you could also calculate It by

Investment income forgone 145536
Add:Income from operating warehouse -23736
Total estimated income from operating warehouse 121800