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Feilx Company owns equipment with a cost of $362,800 and accumulated depreciation of $54,300 that can be sold for $273,300, less a 5% sales commission.
Feilx Company owns equipment with a cost of $362,800 and accumulated depreciation of $54,300 that can be sold for $273,300, less a 5% sales commission. Atternatively, Felix Company can lease the equipment for 3 years for a total of $286,900, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Felix Company on the equipment would total $15,400 over the 3 year lease. a. Prepare a differential analysis on October 29 as to whether Felix Company should lease (Alternative 1) or sell (Alternative 2 ) the equipment. If required, use a minus sign to indicate a loss. Fetoback TCheck My Work. Subtract the lease costs from the lease revenues. Subtract the sell equipment costs from the sell equipment revenues. Determine the differential effect on income of the revenues, costs, and income (loss) by subtracting alternative 1 from alternative 2 . b. Should Felix Company lease (Alternative 1) or sell (Aiternative 2) the equipment
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