Sure-Bilt Construction Company is considering selling excess machinery with a book value of $281,400 (original cost of $400,900 less accumulated depreciation of $119,500) for $275,200, less a 5% brokerage commission. Alternatively, the machinery can be leased to another company for a total of $286,100 for five years, after which it is expected to have no residual value. During the period of the lease, Sure-Bilt Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $26,400.
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Which has high income , Lease or buy?
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- Sure-Bilt Construction Company is considering selling excess machinery with a book value of $278,400 (original cost of $398,100 less accumulated depreciation of $119,700) for $276,300, less a 5% brokerage commission. Alternatively, the machinery can be leased to another company for a total of $287,500 for five years, after which it is expected to have no residual value. During the period of the lease, Sure-Bilt Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $25,900. a. Prepare a differential analysis, dated May 25 to determine whether Sure-Bilt should lease (Alternative 1) or sell (Alternative 2) the machinery. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Lease Machinery (Alt. 1) or Sell Machinery (Alt. 2) May 25 Lease Machinery(Alternative 1) Sell Machinery(Alternative 2) Differential Effecton Income(Alternative 2) Revenues $ $ $ Costs…Inman Construction Company is considering selling excess machinery with a book value of $279,300 (original cost of $400,900 less accumulated depreciation of $121,600) for $274,300, less a 5% brokerage commission. Alternatively, the machinery can be leased to another company for a total of $283,200 for five years, after which it is expected to have no residual value. During the period of the lease, Inman Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $25,100. a. Prepare a differential analysis, dated May 25 to determine whether Inman should lease (Alternative 1) or sell (Alternative 2) the machinery. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Lease Machinery (Alt. 1) or Sell Machinery (Alt. 2) May 25 Differential Effect Sell Machinery (Alternative 2) Lease Machinery on Income (Alternative 2) (Alternative 1) Revenues Costs Income (Loss) Feedback T Check My Work Subtract…Inman Construction Company is considering selling excess machinery with a book value of $282,400 (original cost of $401,900 less accumulated depreciation of $119,500) for $277,700, less a 5% brokerage commission. Alternatively, the machinery can be leased to another company for a total of $287,100 for five years, after which it is expected to have no residual value. During the period of the lease, Inman Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $25,800. a. Prepare a differential analysis, dated May 25 to determine whether Inman should lease (Alternative 1) or sell (Alternative 2) the machinery. For those boxes in which you must enter subtracted or negative numbers use a minus sign. Differential Analysis Lease Machinery (Alt. 1) or Sell Machinery (Alt. 2) May 25 Lease Machinery(Alternative 1) Sell Machinery(Alternative 2) Differential Effecton Income(Alternative 2) Revenues $fill in the blank 0e9403fe1fc606b_1…
- Eclipse Construction Company is considering selling excess machinery with a book value of $280,000 (original cost of $400,000 less accumulated depreciation of $120,000) for $221,000, less a 5% brokerage commission. Alternatively, the machinery can be leased for a total of $216,000 for five years, after which it is expected to have no residual value. During the period of the lease, Eclipse Construction Company’s costs of repairs, insurance, and property tax expenses are expected to be $14,200. Required: A. Prepare a differential analysis, dated April 16 to determine whether Eclipse should lease (Alternative 1) or sell (Alternative 2) the machinery. Refer to the Amount Descriptions list provided 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. B. On the basis of the data…Burlington Construction Company is considering selling excess machinery with a book value of $280,500 (original cost of $398,800 less accumulated depreciation of $118,300) for $275,900, less a 5% brokerage commission. Alternatively, the machinery can be leased for a total of $283,200 for five years, after which it is expected to have no residual value. During the period of the lease, Burlington Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $25,800. a. Prepare a differential analysis dated January 15 to determine whether Burlington Construction Company should lease (Alternative 1) or sell (Alternative 2) the machinery. If required, use a minus sign to indicate a loss. Differential AnalysisLease (Alt. 1) or Sell (Alt. 2) MachineryJanuary 15 LeaseMachinery(Alternative 1) SellMachinery(Alternative 2) DifferentialEffects(Alternative 2) Revenues $fill in the blank 0e8800fac01dfcd_1 $fill in the blank 0e8800fac01dfcd_2 $fill…Beemer Construction Company is considering selling excess machinery with a bookvalue of $280,000 (original cost of $400,000 less accumulated depreciation of$120,000) for $221,000, less a 5% brokerage commission. Alternatively, the machinerycan be leased for a total of $216,000 for five years, after which it is expected to haveno residual value. During the period of the lease, Eclipse Construction Company'scosts of repairs, insurance, and property tax expenses are expected to be $14,200. Prepare and show in solution a differential analysis, dated April 16 to determinewhether Beemer should lease (Alternative 1) or sell (Alternative 2) the machinery
- Stowe Construction Company is considering selling excess machinery with a book value of $280,700 (original cost of $399,000 less accumulated depreciation of $118,300) for $277,900, less a 5% brokerage commission. Alternatively, the machinery can be leased for a total of $285,600 for 5 years, after which it is expected to have no residual value. During the period of the lease, Stowe Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $24,500. a. Prepare a differential analysis dated March 21 to determine whether Stowe Construction Company should lease (Alternative 1) or sell (Alternative 2) the machinery. If required, use a minus sign to indicate a loss. Differential Analysis Lease (Alt. 1) or Sell (Alt. 2) Machinery March 21 Lease Sell Line Item Description Machinery Machinery Differential Effects (Alternative 1) (Alternative 2) (Alternative 2) < Revenues Costs Profit (loss) งPike Industries is considering selling excess machinery with a book value of $150,000 (original cost of $475,000 less accumulated depreciation of $325,000) for $72,500 less a 5% brokerage commission. Alternatively, the machinery can be leased out for a total of $107,500 for five years, after which it is expected to have no residual value. During the period of the lease, Pike Industries' costs of repairs, insurance, and property tax expenses are expected to be $40,000. a. Prepare a differential analysis report for the lease or sell decision. PIKE INDUSTRIES Proposal to Lease or Sell Machinery Differential Analysis Report Differenti revenue from alternatives: Differential cost of alternatives: b. Based on the data presented, which is the most appropriate plan of action?Stowe Construction Company is considering selling excess machinery with a book value of $281,500 (original cost of $400,300 less accumulated depreciation of $118,800) for $274,900, less a 5% brokerage commission. Alternatively, the machinery can be leased for a total of $285,500 for 5 years, after which it is expected to have no residual value. During the period of the lease, Stowe Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $24,900. Question Content Area a. Prepare a differential analysis dated March 21 to determine whether Stowe Construction Company should lease (Alternative 1) or sell (Alternative 2) the machinery. If required, use a minus sign to indicate a loss. Differential AnalysisLease (Alt. 1) or Sell (Alt. 2) MachineryMarch 21 Line Item Description LeaseMachinery(Alternative 1) SellMachinery(Alternative 2) DifferentialEffects(Alternative 2) Revenues $Revenues $Revenues $Revenues Costs Costs Costs Costs…
- Mequon Inc. wishes to lease machinery to Thiensville Company. Thiensville wants the machinery for 4 years, although it has a useful life of 10 years. The machinery has a fair value at the commencement of the lease of $47,000, and Mequon expects the machinery to have a residual value at the end of the lease term of $30,000. However, Thiensville does not guarantee any part of the residual value. Thiensville does expect that the residual value will be $45,000 instead of $30,000. What would be the amount of the annual rental payments Mequon demands of Thiensville, assuming each payment will be made at the end of each year and Mequon wishes to earn a rate of return on the lease of 6%?Teal Mountain Inc. wishes to lease machinery to Thiensville Company. Thiensville wants the machinery for 4 years, although it has a useful life of 10 years. The machinery has a fair value at the commencement of the lease of $38,000, and Teal Mountain expects the machinery to have a residual value at the end of the lease term of $27,000. However, Thiensville does not guarantee any part of the residual value. Thiensville does expect that the residual value will be $36,000 instead of $27,000. What would be the amount of the annual rental payments Teal Mountain demands of Thiensville, assuming each payment will be made at the end of each year and Teal Mountain wishes to earn a rate of return on the lease of 5%? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places, e.g. 5,275.) Click here to view factor tables. Amount of equal annual lease payments %24Kingbird Inc. wishes to lease machinery to Thiensville Company. Thiensville wants the machinery for 4 years, although it has a useful life of 10 years. The machinery has a fair value at the commencement of the lease of $45,000, and Kingbird expects the machinery to have a residual value at the end of the lease term of $28,000. However, Thiensville does not guarantee any part of the residual value. Thiensville does expect that the residual value will be $43,000 instead of $28,000.What would be the amount of the annual rental payments Kingbird demands of Thiensville, assuming each payment will be made at the end of each year and Kingbird wishes to earn a rate of return on the lease of 5%? (For calculation purposes, use 5 decimal places as displayed in the factor table provided and round final answer to 0 decimal places, e.g. 5,275.)Click here to view factor tables. Amount of equal annual lease payments $