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Differential analysis for a lease - or - buy decision Moffett Industries is considering new equipment. The equipment can be purchased from an overseas supplier

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Differential analysis for a lease-or-buy decision
Moffett Industries is considering new equipment. The equipment can be purchased from an overseas supplier for $3,320. The freight and installation costs for the equipment are $630. If purchased, annual repairs and maintenance are estimated to be $380 per year over the 4-year useful life of the equipment. Alternatively, Moffett Industries can lease the equipment from a domestic supplier for $1,440 per year for 4 years, with no additional costs.
a. Prepare a differential analysis dated February 12 to determine whether Moffett Industries should lease (Alternative 1) or purchase (Alternative 2) the equipment. (Hint: This is a "lease or buy" decision, which must be analyzed from the perspective of the equipment user, as opposed to the equipment owner.) If an amount is zero, enter "0".
Differential Analysis
Lease (Alt.1) or Buy (Alt.2) Equipment
February 12
\table[[,February 12,,],[Line Item Description,Lease,Buy,Differential],[Equipment,Equipment,Effects],[(Alternative 1),Alternative 2),(Alternative 2)]]
Costs:
Purchase price
Freight and installation
Repair and maintenance (4 years)
Lease (4 years)
Total costsZ
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