Granite Construction Company is considering selling excess machinery with a book value of $281,700 (original cost of $400,600 less accumulated depreciation of $118,900) for $274,100, less a 5% brokerage commission. Alternatively, the machinery can be leased for a total of $285,200 for five years, after which it is expected to have no residual value. During the period of the lease, Granite Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $25,500.

a. Prepare a differential analysis, dated November 7 to determine whether Granite should lease (Alternative 1) or sell (Alternative 2) the machinery.

Differential Analysis
Lease Machinery (Alt. 1) or Sell Machinery (Alt. 2)
November 7
	Lease Machinery (Alternative 1)	Sell Machinery (Alternative 2)	Differential Effect on Income (Alternative 2)
Revenues	$fill in the blank d40acb017fe8030_1	$fill in the blank d40acb017fe8030_2	$fill in the blank d40acb017fe8030_3
Costs	fill in the blank d40acb017fe8030_4	fill in the blank d40acb017fe8030_5	fill in the blank d40acb017fe8030_6
Income (Loss)	$fill in the blank d40acb017fe8030_7	$fill in the blank d40acb017fe8030_8	$fill in the blank d40acb017fe8030_9

b. On the basis of the data presented, would it be advisable to lease or sell the machinery?