Kincaid Company owns equipment with a cost of $367,700 and accumulated depreciation of $56,200 that can be sold for $274,600, less a 3% sales commission. Alternatively, Kincaid Company can lease the equipment for three years for a total of $285,700, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Kincaid Company on the equipment would total $15,300 over the three year lease.

a. Prepare a differential analysis on February 18, as to whether Kincaid Company should lease (Alternative 1) or sell (Alternative 2) the equipment. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Differential Analysis
Lease (Alt. 1) or Sell (Alt. 2) Equipment
February 18
	Lease Equipment (Alternative 1)	Sell Equipment (Alternative 2)	Differential Effect on Income (Alternative 2)
Revenues	$	$	$
Costs
Income (Loss)	$	$	$

b. Should Kincaid Company lease (Alternative 1) or sell (Alternative 2) the machine?