Differential Analysis for a Lease or Sell Decision

Differential Anaiysis for a Lease or Sell Decision Burlington Construction Company is considering selling excess machinery with a book value of $280,600 (original cost of 5398,900 less accumulated depreciation of $118,300 ) for $276,500, less a 5% brokerage commission. Aiternatively, the machinery can be feased for s total of $283,900 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 tox expenses are expected to be 526,500 . a. Prepare a differential analysis dated January 15 to determine whether Burlington Construction Company ahould lease (Aiternative 1) or sell (Alternative 2) the machinery, If required, use a minus sign to indicate a loss. Differential Analysis b. On the basis of the data presented, would it be advisable to lease or sell the machinery