Gilroy Corporation is considering new equipment. The equipment can be purchased from an overseas supplier for $3,200. The freight and installation costs for the equipment are $640. If purchased, annual repairs and maintenance are estimated to be $400 per year over the four-year useful life of the machine. Alternatively, Gilroy can lease the machine from a domestic supplier for $1,400 per year for four years, with no additional costs. Prepare a differential analysis dated October 3, 2012, to determine whether Gilroy should lease (Alternative 1) or purchase (Alternative 2) the machine.