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Differential Analysis for a Lease-or-Sell Decision

Inman Construction Company is considering selling excess machinery with a book value of $280,000 (original cost of $401,200 less accumulated depreciation of $121,200) for $274,500, less a 5% brokerage commission. Alternatively, the machinery can be leased to another company for a total of $285,500 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 $26,500.

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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 Effect on Income (Alternative 2)
Revenues	$fill in the blank 63d9a2f8705cfd5_1	$fill in the blank 63d9a2f8705cfd5_2	$fill in the blank 63d9a2f8705cfd5_3
Costs	fill in the blank 63d9a2f8705cfd5_4	fill in the blank 63d9a2f8705cfd5_5	fill in the blank 63d9a2f8705cfd5_6
Income (Loss)	$fill in the blank 63d9a2f8705cfd5_7	$fill in the blank 63d9a2f8705cfd5_8	$fill in the blank 63d9a2f8705cfd5_9