Burlington Construction Company is considering selling excess machinery with a book value of $281,600 (original cost of $402,000 less accumulated depreciation of $120,400) for $277,900, less a 5% brokerage commission. Alternatively, the machinery can be leased for a total of $286,300 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 $25,000. 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 Analysis Lease (Alt. 1) or Sell (Alt. 2) Machinery January 15   Lease Machinery (Alternative 1) Sell Machinery (Alternative 2) Differential Effects (Alternative 2) Revenues ? ? ? Costs ? ? ? Profit (Loss) ? ? ? b.  On the basis of the data presented, would it be advisable to lease or sell the machinery?

Lease or Sell Decision Sure-Bilt Industries is considering selling excess machinery with a book value of $281,500 (original cost of $401,300 less accumulated depreciation of $119,800) for $275,000 less a 6% brokerage commission. Alternatively, the machinery can be leased for a total of $284,900 for five years, after which it is expected to have no residual value. During the period of the lease, Sure-Bilt Industries' costs of repairs, insurance, and property tax expenses are expected to be $25,900. a. Prepare a differential analysis report for the lease or sell decision. SURE-BILT INDUSTRIES Proposal to Lease or Sell Machinery Differential Analysis Report Differential revenue from alternatives: Revenue from lease Proceeds from sale v Differential revenue from lease V Differential cost of alternatives: Repairs, insurance, and property tax expenses from lease Commission on sale Differential cost of lease Net differential gain from lease alternative

Differential Analysis for a Lease or Sell Decision Granite Construction Company is considering selling excess machinery with a book value of $279,500 (original cost of $401,200 less accumulated depreciation of $121,700) for $276,600, less a 5% brokerage commission. Alternatively, the machinery can be leased for a total of $283,400 for five years, after which it is expected to have no residual value. During the period of the lease, Granite Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $26,400. a. Prepare a differential analysis, dated November 7 to determine whether Granite should lease (Alternative 1) or sell (Alternative 2) the machinery. Differential Analysis. Lease Machinery (Alt. 1) or Sell Machinery (Alt. 2) November 7 Lease Machinery (Alternative 1) Sell Machinery (Alternative 2) Differential Effect on Income (Alternative 2) Revenues Costs Income (Loss) 1000

Differential Analysis for a Lease or Sell Decision Burlington Construction Company is considering selling excess machinery with a book value of $277,900 (original cost of $398,200 less accumulated depreciation of $120,300) for $274,300, less a 5% brokerage commission. Alternatively, the machinery can be leased for a total of $285,000 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 $25,000. 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 Analysis Lease (Alt. 1) or Sell (Alt. 2) Machinery January 15 Lease Sell Differential Machinery Machinery Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues Costs Profit (Loss) b. On the basis of…