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Net differential profit or loss Keating Co. is considering disposing of equipment that cost $77,000 and has $53,900 of accumulated depreciation to date. Keating Co.
Net differential profit or loss
Keating Co. is considering disposing of equipment that cost $77,000 and has $53,900 of accumulated depreciation to date. Keating Co. can sell the equipment through a broker for $32,000 less a 5% commission. Alternatively, Gunner Co. has offered to lease the equipment for five years for a total of $46,000. Keating will incur repair, insurance, and property tax expenses estimated at $10,000 over the five-year period. At lease-end, the equipment is expected to have no residual value. The net differential profit or loss from the sell alternative is a a. $3,920 loss Ob. $5,600 loss c. $8,400 profit d. $6,720 profit
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