Lease or Sell Bullwinkle Company owns equipment with a cost of $365,400 and accumulated depreciation of 555,400 that can be sold for $275,500, less a 4% sales commission. Alternatively, Bullwinkle Company can lease the equipment for three years for a total of $285,100, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Bullwinkle Company on the equipment would total 515,300 over the three year lease. a. Prepare a differential analysis on February 18, as to whether Bullwinkle Company should lease (Alternative 1) or sell (Alternative 2) the equipment. Differential Analysis Lease (Alt. 1) or Sell (Alt. 2) Equipment February 18 Differential Effect Lease Equipment Sell Equipment (Alternative 1) (Alternative 2) on Income (Alternative 2) Revenues $ 285,100 273 200 x -11.900 X Costs 11,404 x 10,928 X -176 Income (Loss) 273,696 X 262,272 X - 114,124 X Feedback Check My Work Subtract the lease costs from the lease revenues. Subtract the sell machine costs from the sell machine revenues. Determine the differential effect on income of the revenues, costs, and income (loss) by subtracting alternative 2 from alternative 1. Learning Objective 1. b. Should Bullwinkle Company lease (Alternative 1) or sell (Alternative 2) the equipment? Lease the equipment