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Astro Company owns equipment with a cost of $367,500 and accumulated depreciation of $53,100 that can be sold for $275,100, less a 5% sales commission.
Astro Company owns equipment with a cost of $367,500 and accumulated depreciation of $53,100 that can be sold for $275,100, less a 5% sales commission. Alternatively, Astro Company can lease the equipment for three years for a total of $287,400, 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 $15,700 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 Sell Differential Equipment Equipment Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues Costs Profit (Loss) b. Should Astro Company lease (Alternative 1) or sell (Alternative 2) the equipment
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