Lease or Sell Decision Orwell Industries is considering selling excess machinery with a book value of $300,000 (original cost of $950,000 less accumulated depreciation of $650,000) for $145,000 less a 5% brokerage commission. Alternatively, the machinery can be leased out for a total of $215,000 for five years, after which it is expected to have no residual value. During the period of the lease, Orwell Industries' costs of repairs, insurance, and property tax expenses are expected to be $80,000. a. Prepare a differential analysis report for the lease or sell decision. ORWELL INDUSTRIES Proposal to Lease or Sell Machinery Differential Analysis Report Differential revenue from alternatives: Revenue from lease $ Proceeds from sale x 225,000 145,000 Differential revenue from lease $ 70,000 Differential cost of alternatives: Repairs, insurance, and property tax expenses from lease $ 80,000 Commission on sale 7,250 Differential cost of lease 72,750 -72,750 Net differential loss from lease alternative $ x Feedback