Fowler Construction Company is considering selling excess machinery with a book value of \($200,000\) (original cost of \($325,000\) less accumulated depreciation of \($125,000)\) for \($160,000\) less a 10% brokerage commission. Alternatively, the machinery can be leased for a total of \($180,000\) for five years, after which it is expected to have no residual value. During the period of the lease, Fowler Construction Company’s costs of repairs, insurance, and property tax expenses are expected to be \($33,000\).

a. Prepare a differential analysis report, dated January 3 of the current year, for the lease or sell decision.

b. On the basis of the data presented, would it be advisable to lease or sell the machinery? Explain.