=+E12-1 Lease orsell decision Obj 1 SPREADSHEET V

a. Differential revenue from lease, $30,000 VanderhoffConstruction Company is considering selling excess machinery with a book value of

$260,000 (original cost of $380,000 less accumulated depreciation of $120,000) for $210,000, less a 4% brokerage commission. Alternatively, the machinery can be leased for a total of $240,000 for five years, after which it is expected to have no residual value. During the period ofthe lease, VanderhoffConstruction Company’s cost ofrepairs, insurance, and property tax expenses are expected to be $28,000.