ifferential Analysis for a Lease$-$or$-$buy Decision

loffett Industries is considering new equipment. The equipment can be purchased from an overseas supplier for $$3,400.$ The freight and installation costs for the :quipment are $$640.$ If purchased, annual repairs and maintenance are estimated to be $$390$ per year over the $4-$year useful life of the equipment. Alternatively, Moffett industries can lease the equipment from a domestic supplier for $$1,500$ per year for $4$ years, with no additional costs.

a$.$ Prepare a differential analysis dated February $12$ to determine whether Moffett Industries should lease $($Alternative $1)$ or purchase $($Alternative $2)$ the equipment. $($Hint: This is a "lease or buy" decision, which must be analyzed from the perspective of the equipment user, as opposed to the equipment owner.$)$ If an amount is zero, enter $"0".$

Differential Analysis

Lease $($Alt$.1)$ or Buy $($Alt$.2)$ Equipment

February $12$

$\backslash$table$[[$Line Item Description,$\backslash$table$[[$Lease$],[$Equipment$],[($Alternative $1)]],\backslash$table$[[$Buy$],[$Equipment$],[($Alternative $2)]],\backslash$table$[[$Differential$],[$Effects$],[($Alternative $2)]]],[,,,],[$Purchase price,$$,$$$-3,400,$$$,-3,400$