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Prepare a differential analysis Differential Analysis for a Lease-or-sell Decision Stowe Construction Company is considering selling excess machinery with a book value of $280,400 (original
Prepare a differential analysis
Differential Analysis for a Lease-or-sell Decision Stowe Construction Company is considering selling excess machinery with a book value of $280,400 (original cost of $399,300 less accumulated depreciation of $118,900 ) for $275,200, less a 5% brokerage commission. Alternatively, the machinery can be leased for a tote of $283,100 for 5 years, after which it is expected to have no residual value. During the period of the lease, Stowe Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $25,900. a. Prepare a differentiol analysis dated March 21 to determine whether Stowe Construction Compony should lease (Afternative 1) or sell (Alternative 2) the machinery. If required, use a minus sign to indicate a loss. b. On the basis of the dats presented, would it be advisable to lease or sell the machinery Step by Step Solution
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