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Rhombus Construction Company is considering selling excess machinery with a book value of $125,000 (original cost of $340,000 less accumulated depreciation of $215,000) for $102,000
Rhombus Construction Company is considering selling excess machinery with a book value of $125,000 (original cost of $340,000 less accumulated depreciation of $215,000) for $102,000 less a 5% brokerage commission. Alternatively, the machinery can be leased to another company for a total of $125,000 for 5 years, after which it is expected to have no residual value. During the lease period, Rhombus Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $36,500. On the basis of the data presented, would it be advisable to lease or sell the machinery? Explain
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