Orwell Industries is considering selling excess machinery with a book value of $300,000 (original cost of $950,000

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Question:

Orwell Industries is considering selling excess machinery with a book value of $300,000 (original cost of $950,000 less accumulated depreciation of $650,000) for $145,000 less a 5% brokerage commission. Alternatively, the machinery can be leased out for a total of $215,000 for five years, after which it is expected to have no residual value. During the period of the lease, Orwell Industries' costs of repairs, insurance, and property tax expenses are expected to be $80,000.

a. Prepare a differential analysis report for the lease or sell decision.