EX 10-1 Differential analysis for a lease or sell decision Obj. 1 Granite Construction Company is considering selling $175,000 (original a 5% brokerage commission. Alternatively, the machinery can be leased for a total of $200,000 for four 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 expected to be $34,400. A. Differential income from selling, $5,400 excess machinery with a book value of Cost of $315,000 less accumulated depreciation of $140,000) for $180,000, less are A. Prepare a differential analysis, dated November 7 to determine whether Granite should lease (Alternative 1) or sell (Alternative 2) the machinery SHOW ME HOW B. On the basis of the data presented, would it be advisable to lease or sell the ma- chinery? Explain. dnia Obj,2 EX 11-1 Average rate of return The following data are accumulated by Lone Peak Inc. in evaluating two competing capital 3D Printer, 16% investment proposals: 3D Printer Truck $40,000 $50,000 10 years $6,000 $36,400 bo cbnu bosm Amount of investment SHOW ME HOW 7 years $3,000 $24,080 Useful life Estimated residual value Estimated total income over the useful life oovDetermine the expected average rate of return for each proposal. noom Obj. 2 EX 14-1 Vertical analysis of income statement A. Current year net income: $360,000; 9% of sales Revenue and expense data for Innovation Ouarter Inc. for two recent years are as follows: Previous Year Current Year $4,000,000 2,280,000 600,000 $3,600,000 1,872,000 Sales Cost of goods sold Selling expenses 648,000 SHOW ME HOW Administrative expenses 520,000 360,000 Income tax expense 240,000 216,000 A. Prepare an income statement in comparative form, stating each item for both years as a percent of sales. (Round to the nearest whole percentage.) B. Comment on the significant changes disclosed by the comparative income statement