Active Euthanasia Comm ,* Chapter 24 Homework X,.. CengageNOWV2IOnlinex Chegg St

Question

Active Euthanasia Comm ,* Chapter 24 Homework X,.. CengageNOWV2IOnlinex Chegg Study I Guided Sc × × ? ? ?v2.cengagenow.com/ilm/takeAssignment takeAssignmentManao?invoker-&takeAssignmentSessionLocator-assignment; take&inprogress-false; Chapter 24 Homework Show Me HoCakculator eBook Print Item Differential Analysis for a Lease or Sell Decision 1. BE.24-02 ALGO Granite Construction Company is considering selling excess machinery with a book value of $280,200 ?original cost of $399,900 less accumulated depreciation of 2. BE.24-05.ALGO 119,700) for $275,500, less a 5% brokerage commission. Alternatively, the machinery can be leased 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, Granite Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $25,900 3. BE.24-06.ALGO . EX 24-01 ALGO 5. EX.24-03.ALGO 6. EX24-06 7. EX.24 07.ALGO a. Prepare a differential analysis, dated November 7 to determine whether Granite should lease (Alternative 1) or sell (Alternative 2) the machinery Differential Analysis Lease Machinery (Alt. 1) or Sell Machinery (Alt. 2) Lease Machinery (Altemative 1) Sell Machinery (Aternative 2) Differential Effect on Income (Aemative 2) Casts ?) 8. EX.24-09.ALGO Income (Loss) 9. EX.24-11.ALGO Feedback 10. EX.24-15 ALGO b. On the basis of the data presented, would it be advisable to lease or sell the machinery? Sell the machinery Feedback T Check My Work Check My Work Previous Next Progress: 4/10 items 4:02 PM A ) 4/26/2018

Explanation / Answer

SOLUTION

(A) Differential analysis-

(B) Advise is to sell the machinery as income is $3,775 more.

Lease Machinery (Alternative 1) Sell Machinery (Alternative 2) Differential Effect on Income (Alternative 2) Revenues 285,500 275,500 10,000 Costs ($275,500 * 5%) 13,775 (13,775) Income/(Loss) 285,500 289,275 3,775

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