Question
Astro Company owns equipment with a cost of $365,600 and accumulated depreciation of $53,800 that can be sold for $275,900, less a 5% sales commission.
Astro Company owns equipment with a cost of $365,600 and accumulated depreciation of $53,800 that can be sold for $275,900, less a 5% sales commission. Alternatively, Astro Company can lease the equipment for three years for a total of $288,300, 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 equipment would total $16,700 over the three year lease. a. Prepare a differential analysis on August 7 as to whether Astro Company should lease (Alternative 1) or sell (Alternative 2) the equipment. If required, use a minus sign to indicate a loss. Differential Analysis Lease Equipment (Alt. 1) or Sell Equipment (Alt. 2) August 7 Lease Equipment (Alternative 1) Sell Equipment (Alternative 2) Differential Effects (Alternative 2) Revenues $fill in the blank b6ec67f4b04603d_1 $fill in the blank b6ec67f4b04603d_2 $fill in the blank b6ec67f4b04603d_3 Costs fill in the blank b6ec67f4b04603d_4 fill in the blank b6ec67f4b04603d_5 fill in the blank b6ec67f4b04603d_6 Profit (Loss) $fill in the blank b6ec67f4b04603d_7 $fill in the blank b6ec67f4b04603d_8 $fill in the blank b6ec67f4b04603d_9 b. Should Astro Company lease (Alternative 1) or sell (Alternative 2) the equipment?
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