Differential Analysis for a Lease or Buy Decision Laredo Corporation is considering new equipment. The equipment can be purchased from an overseas supplier for $3,120. The freight and installation costs for the equipment are $660. If purchased, annual repairs and maintenance are estimated to be $420 per year over the four-year useful life of the equipment. Alternatively, Laredo Corporation can lease the equipment from a domestic supplier for $1,400 per year for four years, with no additional costs. Prepare a differential analysis dated March 15 to determine whether Laredo Corporation 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 Differential Analysis Lease (Alt. 1) or Buy (Alt. 2) Equipment March 15 Lease Equipment Buy Equipment Differential Effects (Alternative 1) (Alternative 2) (Alternative 2) Costs: Purchase price Freight and installation Repair and maintenance (4 years) Lease (4 years) Total costs Feedback Check My Work Compare the lease costs for 4 years with the buying costs for 4 years (purchase price, freight and installation, and repair and maintenance). Determine the differential effect of the costs by subtracting alternative 1 from alternative 2