Differential Analysis for a Lease or Sell Decision Burlington Construction Company is considering selling excess machinery with a book value of $281,500 (original cost of $401,000 less accumulated depreciation of $119,500) for $274,700, less a 5% brokerage commission. Alternatively, the machinery can be leased for a total of $286,600 for five years, after which it is expected to have no residual value. During the period of the lease, Burlington Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $25,700. a. Prepare a differential analysis dated January 15 to determine whether Burlington Construction Company should lease (Alternative 1) or sell (Alternative 2) the machinery. If required, use a minus sign to indicate a loss. Differential Analysis Lease (Alt. 1) or Sell (Alt. 2) Machinery January 15 Sell Machinery Machinery Effects (Alternative 1) (Alternative 2) (Alternative 2) Differential Lease Revenues Costs Profit (Loss) b. On the basis of the data presented, would it be advisable to lease or sell the machinery? Lease the machinery Sell the machinery Sell or Process Further Calgary Lumber Company incurs a cost of $386 per hundred board feet (hbf) in processing certain "rough-cut" lumber, which it sells for $544 per hbf. An alternative is to produce a "finished-cut" at a total processing cost of $522 per hbf, which can be sold for $740 per hbf. a. Prepare a differential analysis dated March 15 on whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2). Differential Analysis Sell Rough-Cut (Alt. 1) or Process Further into Finished-Cut (Alt. 2) March 15 Sell Process Further Differential Rough-Cut into Finished-Cut Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues, per 100 board ft. Costs, per 100 board ft. Profit (Loss), per 100 board ft. b. Determine whether to sell rough-cut lumber (Alternative 1) or process further into finished-cut lumber (Alternative 2). Sell rough-cut lumber. Process further and sell finished-cut lumber