EX 25-1 Differential analysis for a lease-or-sell decision OBJ. 1 rential Rhombus Construction Company is considering selling excess machinery with a book n selling, value of $125,000 (original cost of $340,000 less accumulated depreciation of $215,000) for $102,000 less a 5% brokerage commission. Alternatively, the machinery can be leased to another company for a total of $125,000 for 5 years, after which it is expected to have no residual value. During the period of the lease, Rhombus Construction Company's costs HOW of repairs, insurance, and property tax expenses are expected to be $36,500. E HOW a. Prepare a differential analysis dated May 25 to determine whether Rhombus should Lease Machinery (Alternative 1) or Sell Machinery (Alternative 2). b. On the basis of the data presented, would it be advisable to lease or sell the machinery? ExplainEX 25-3 Differential analysis for a discontinued product OBJ. 1 iscontinue 13,300) A condensed income statement by product line for Celestial Beverage Inc. indicated the following for Star Cola for the past year: Sales $390,000 V W Cost of goods sold 184,000 Gross profit $206,000 Operating expenses 255,000 Loss from operations $ (49,000) It is estimated that 20% of the cost of goods sold represents fixed factory overhead costs and that 30% of the operating expenses are fixed. Because Star Cola is only one of many products, the fixed costs will not be materially affected if the product is discontinued. a. Prepare a differential analysis dated January 21 to determine whether to Continue Star Cola (Alternative 1) or Discontinue Star Cola (Alternative 2). Should Star Cola be retained? Explain. b