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Ferrigno Company owns equipment with a cost of $366,200 and accumulated depreciation of $55,500 that can be sold for $275,200, less a 3% sales commission.

Ferrigno Company owns equipment with a cost of $366,200 and accumulated depreciation of $55,500 that can be sold for $275,200, less a 3% sales commission. Alternatively, Ferrigno Company can lease the equipment to another company for three years for a total of $288,300, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Ferrigno Company on the equipment would total $15,700 over the three years.

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