1.

Keating Co. is considering disposing of equipment with a cost of $67,000 and accumulated depreciation of $46,900. Keating Co. can sell the equipment through a broker for $35,000, less a 9% broker commission. Alternatively, Gunner Co. has offered to lease the equipment for five years for a total of $47,000. Keating will incur repair, insurance, and property tax expenses estimated at $8,000 over the five-year period. At lease-end, the equipment is expected to have no residual value. The net differential income from the lease alternative is

a.$7,150

b.$5,005

c.$10,725

d.$8,580

2.

Use this information for Stryker Industries to answer the question that follow.

Stryker Industries received an offer from an exporter for 21,000 units of product at $17 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available:

Domestic unit sales price	$23
Unit manufacturing costs:
Variable	10
Fixed	4

What is the amount of income or loss from the acceptance of the offer?

a.$483,000 loss

b.$210,000 loss

c.$147,000 income

d.$357,000 income