Winn Corporation has some equipment they are no longer planning on using. They are deciding between leasing the equipment to another company or just selling it to a different company. The following information is available:

Original cost of equipment $250,000

Accumulated depreciation on equipment 100,000

Salvage value of asset 6,000

Selling price 90,000

Leasing Price per year 20,000

Annual expenses relating to leasing 7,500

Brokers commission on sale 15%

Life of lease 8 years

Required

• Calculate the total net income if the asset is sold.
• Calculate the total net income if the asset is leased.
• What should the company do? Explain your answer.

	Selling Asset	Leasing Asset
Total Revenue
Total Expenses
Net Income

What should the company do?