Lease or Sell Casper Company owns equipment with cost of $366,500 and accumulated depreciation of $53,400 that can be sold for $277,300, less a 3% sales commission. Alternatively, Casper Company can lease the equipment for three years for a total of $287,100, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Casper Company on the equipment would total $15,900 over the three year lease. a. Prepare a differential analysis on August 7 as to whether Casper Company should lease (Alternative 1) or sell (Alternative 2) the equipment. If required, use a minus sign to indicate a loss. Differential Analysis Lease Equipment (Alt. 1) or Sell Equipment (Alt. 2) August 7 Lease Sell Differential Equipment (Alternative 1) (Alternative 2) (Alternative 2) Equipment Effects Revenues Costs Profit (Loss) b. Should Casper Company lease (Alternative 1) or sell (Alternative 2) the equipment?

(Lessor Computations and Entries, Sales-Type Lease with Unguaranteed Residual Value) George Company manufactures a check-in kiosk with an estimated economic life of 12 years and leases it to National Airlines for a period of 10 years. The normal selling price of the equipment is $278,072, and its unguaranteed residual value at the end of the lease term is estimated to be $20,000. National will pay annual payments of $40,000 at the beginning of each year and all maintenance, insurance, and taxes. George incurred costs of $180,000 in manufacturing the equipment and $4,000 in negotiating and closing the lease. George has determined that the collectibility of the lease payments is reasonably predictable,that no additional costs will be incurred, and that the implicit interest rate is 10%.Instructions(a) Discuss the nature of this lease in relation to the lessor and compute the amount of each of the following items.(1) Lease receivable.(2) Sales price.(3) Cost of sales.(b) Prepare a 10-year…

An asset costs $640,000 and will be depreciated in a straight-line manner over its four-year life. It will have no salvage value. The lessor can borrow at 6 percent and the lessee can borrow at 6 percent. If the lessor is in the 20 percent tax bracket and the lessee pays no taxes. For what range of lease payments does the lease have a positive NPV for both parties? Between $184,561 and $184,699 Between $179,650 and $184,699 Between $179,650 and $184,561 The range does not exist

Kincaid Company owns equipment with a cost of $364,100 and accumulated depreciation of $53,600 that can be sold for $273,400, less a 4% sales commission. Alternatively, Kincaid Company can lease the equipment for 3 years for a total of $287,600, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Kincaid Company on the equipment would total $14,900 over the 3-year lease. a. Prepare a differential analysis on October 29 as to whether Kincaid Company should lease (Alternative 1) or sell (Alternative 2) the equipment. If required, use a minus sign to indicate a loss. Differential Analysis Lease Equipment (Alt. 1) or Sell Equipment (Alt. 2) October 29 Lease Sell Differential Line Item Description Equipment Equipment (Alternative 1) (Alternative 2) Effects (Alternative 2) < Revenues Costs 287,600 $ 273,400 $14,200 14,900 Profit (Loss) 272,700 X Feedback Check My Work Subtract the lease costs from the lease…