Question
Astro Company owns a machine with a cost of $366,600 and accumulated depreciation of $53,800 that can be sold for $273,000, less a 5% sales
Astro Company owns a machine with a cost of $366,600 and accumulated depreciation of $53,800 that can be sold for $273,000, less a 5% sales commission. Alternatively, the machine can be leased by Astro Company for three years for a total of $284,100, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Astro Company on the machine would total $15,100 over the three years. Prepare a differential analysis on January 12, as to whether Astro Company should lease (Alternative 1) or sell (Alternative 2) the machine.
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