IC Exercises SHOW ME HOW BE 10-1 Lease or sell Obj. 1 McFadden Company owns equipment with a cost of $475,000 and accumulated depreciation of $280,000 that can be sold for $175,000, less a 7% sales commission. Alternatively, McFadden Company can lease the equipment for four years for a total of $180,000, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by McFadden Company on the equipment would total $35,500 over the four-year lease. Prepare a differential analysis on February 18 as to whether McFadden Company should lease (Alternative 1) or sell (Alternative 2) the equipment. FACILISCS Printer, 16% EX 11-1 Average rate of retum Obj. 2 The following data are accumulated by Lone Peak Inc. in evaluating two competing capital investment proposals: 3D Printer Truck SHOW ME HOW $50,000 10 years Amount of investment $40,000 Useful life 7 years Estimated residual value $3,000 Estimated total income over the useful life $24,080 Determine the expected average rate of return for each proposal. $6,000 $36,400