Lease or Sell

Kincaid Company owns equipment with a cost of $$364,500$ and accumulated depreciation of $$54,400$ that can be sold for $$273,700,$ less a $4\%$ sales commission. Alternatively, Kincaid Company can lease the equipment for $3$ years for a total of $$288,100,$ at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Kincaid Company on the equipment would total $$16,400$ over the $3-$year lease.

Question Content Area

a$.$ Prepare a differential analysis on October $29$ as to whether Kincaid Company should lease $($Alternative $1)$ or sell $($Alternative $2)$ the equipment. If required, use a minus sign to indicate a loss.