Question
Beagle Bus Co. is considering disposing of a bus (asset). Beagle can sell the bus through a broker for a negotiated price less a 6%
Beagle Bus Co. is considering disposing of a bus (asset). Beagle can sell the bus through a broker for a negotiated price less a 6% broker commission. Alternatively, Collie, Inc. has offered to lease the bus for six years for a total of $82,000. If the bus is leased to Collie, Beagle will incur maintenance, insurance, and license expenses estimated at $4,700 per year over the six-year lease period. At lease end, the bus is expected to have no residual value. Beagle leases the bus to Collie for 6 years. This results in an increase in Beagles net income of $8,000 over six years. Calculate the negotiated sales price of the bus that was not sold (round to nearest $1).
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