Differential Analysis for a Lease$-$or$-$Sell Decision

Sure$-$Bilt Construction Company is considering selling excess machinery with a book value of $$280,600($original cost of $$398,900$ less accumulated depreciation of

$$118,300)$ for $$276,900,$ less a $5\%$ brokerage commission. Alternatively, the machinery can be leased to another company for a total of $$286,700$ for five years, after

which it is expected to have no residual value. During the period of the lease, Sure$-$Bilt Construction Company's costs of repairs, insurance, and property tax expenses are

expected to be $$24,900.$

a$.$ Prepare a differential analysis, dated May $25$ to determine whether Sure$-$Bilt should lease $($Alternative $1)$ or sell $($Alternative $2)$ the machinery. For those boxes in

which you must enter subtracted or negative numbers use a minus sign.

Differential Analysis

Lease Machinery $($Alt$.1)$ or Sell Machinery $($Alt$.2)$

May $25$

b$.$ On the basis of the data presented, would it be advisable to lease or sell the machinery? Explain.

The net

from selling is $