Differential Analysis for a Lease$-$or$-$sell Dedision

Stowe Construdion Company is considering selling excess machinery with a book value of $$25,000($original coot of $$180,000$ less acoumuated depredation of $$155,000)$ for $$35,000,$ less a $5\%$ brokerage commission. Atternatively, the machinery can be leased for a total of $\%18,000$ for $4$ years, after which it is expected to have no residual value. During the period of the lease, Stowe Construction Company$/$s costs of repairs, insurance, and property tax expenses are expected to be $$12,000.$

a$.$ Prepare a differential analysis dated March $21$ to determine whether Stowe 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

March $21$

$\backslash$table$[[$Line Item Description,$\backslash$table$[[$Lease$],[$Machiner$],[($Altemative$]],,\backslash$table$[[$Sell$],[$Machinery$],[($Alternative$]],$y$),\backslash$table$[[$Differential$],[$Effects$],[($Altemative $2]]],[$Revenues$,48\mathrm{.}000,,$$$,,13,000],[$Costs$,,x,,x,],[$Profit $($loss$),4,,4,,4]]$

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