Alissas Place needs a new paper copier, Alissa Hoss, the owner, is faced with the following two alternatives:

			Buy		Lease
Cost of equipment		$ 15,000.00		$ -
Semi-Annual equipment rental	$ -		$ 3,500.00
Salvage value in 3 years	$ 2,000.00		$ -
Annual costs:
	Labor		$ 25,000.00		$ 25,000.00
	Supplies		$ 3,000.00		$ 3,000.00
	Utilities		$ 2,000.00		$ 2,000.00
	Interest expense	$ 1,000.00		$ -
	Repairs		$ 1,500.00		$ -

Additional information:

Assume that the paper copier has a three-year life.

REQUIRED:

1. Which costs are irrelevant?
2. Prepare a three-year cost schedule for each alternative and include only relevant costs. (Ignore income taxes and the time value of money)
3. What alternative would you recommend?