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

Sure$-$Bilt Construction Company is considering selling excess machinery with a book value of $$277,800($original cost of $$398,800$ less accumulated depreciation of $$121,000)$ for $$274,200,$ less a $5\%$ brokerage commission. Alternatively, the machinery can be leased to another company for a total of $$283,200$ for five years, after which it is expected to have no residual value. During the period of the lease, Sure$-$Bilt Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $$26,300.$

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 $25$

$\backslash$table$[[,\backslash$table$[[$Lease Machinery$],[($Alternative $1)]],\backslash$table$[[$Sell Machinery$],[($Alternative $2)]],\backslash$table$[[$Differential Effects$],[($Alternative $2)]]],[$Revenues$,$$$,$$$,$$