Sloan Corporation is considering new equipment. The equipment can be purchased from an overseas supplier for $3,787. The freight and installation costs for the equipment are $450. If purchased, annual repairs and maintenance are estimated to be $402 per year over the four-year useful life of the equipment. Alternatively, Sloan can lease the equipment from a domestic supplier for $1,701 per year for four years, with no additional costs.

	Required:
a.	Prepare a differential analysis dated December 3 to determine whether Sloan should lease (Alternative 1) or purchase (Alternative 2) the equipment. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required. (Hint: This is a lease or buy decision, which must be analyzed from the perspective of the equipment user, as opposed to the equipment owner.)
b.	Determine whether the Sloan should lease (Alternative 1) or purchase (Alternative 2) the equipment.

Labels:
Cash flows from operating activities
Costs
Amount Descriptions:
Freight and installation
Import tariff
Income (loss)
Lease (4 years)
Purchase price
Repair and maintenance (4 years)
Revenues

a. Prepare a differential analysis dated December 3 to determine whether Sloan should lease (Alternative 1 or purchase (Alternative 2) the equipment. Refer to the lists of Labels and Amount Descriptions for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign. If there is no amount or an amount is zero, enter "0". A colon (:) will automatically appear if required. Hint: This is a "lease or buy" decision, which must be analyzed from the perspective of the equipment user, as opposed to the equipmentowner. Differential Analysis Lease (Alternative 1) or Buy (Alternative 2) Equipment December 3 Differential Lease Equipment Buy Equipment Effect on Income Alternative 1) (Alternative 2) (Alternative 2) Label) b. Determine whether the Sloan should lease (Alternative 1) or purchase (Alternative 2) the equipment. The company is indifferent since the result is the same regardless of which alternative is chosen. Buy the equipment Lease the equipment