Question: Norton Corporation is considering new equipment The equipment can be
Norton Corporation is considering new equipment. The equipment can be purchased from an overseas supplier for $ 4,600. The freight and installation costs for the equipment are $ 590. If purchased, annual repairs and maintenance are estimated to be $ 620 per year over the four- year useful life of the equipment. Alternatively, Norton can lease the equipment from a domestic supplier for $ 1,800 per year for four years, with no additional costs. Prepare a differential analysis dated August 4, 2014, to determine whether Norton should lease (Alternative 1) or purchase (Alternative 2) the equipment.
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