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3) XYZ is considering selling excess equipment originally costing $8 billion dollars with a book value of $2 for $100,000 requiring a 5% sales commission
3) XYZ is considering selling excess equipment originally costing $8 billion dollars with a book value of $2 for $100,000 requiring a 5% sales commission to the broker. Alternatively they can lease the machine for 7 years at $14,000 annually, but would have to pay $1000 in insurance costs each year, At the end of the seven years the machine will be worthless. Should they sell or lease the equipment. By how much will they be better off? Assume interest rates are ZERO
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