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Assume that Win Co. is considering disposing of equipment that cost $74,582.00 and has $52,207.40 of accumulated depreciation to date. Win Co. can sell the equipment through a broker for $30,681.00 less 5% commission. Alternatively, But Co. has offered to lease the equipment for five years for a total of $48,245.00. Win will incur repair, insurance, and property tax expenses estimated at $9,671.00. At lease end, the equipment is expected to have no residual value. Determine the net differential income from the lease alternative. a. $29,146.95 b. $48,245.00 c. $9,427.05 d. $16,199.40

Assume that Win Co. is considering disposing of equipment that cost $74,582.00 and has $52,207.40 of accumulated depreciation to date. Win Co. can sell the equipment through a broker for $30,681.00 less 5% commission. Alternatively, But Co. has offered to lease the equipment for five years for a total of $48,245.00. Win will incur repair, insurance, and property tax expenses estimated at $9,671.00. At lease end, the equipment is expected to have no residual value. Determine the net differential income from the lease alternative. a. $29,146.95 b. $48,245.00 c. $9,427.05 d. $16,199.40

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Assume that Win Co. is considering disposing of equipment that cost $74,582.00 and has $52,207.40 of accumulated depreciation to date. Win Co. can sell the equipment through a broker for $30,681.00 less 5% commission. Alternatively, But Co. has offered to lease the equipment for five years for a total of $48,245.00. Win will incur repair, insurance, and property tax expenses estimated at $9,671.00. At lease end, the equipment is expected to have no residual value. Determine the net differential income from the lease alternative. a. $29,146.95 b. $48,245.00 c. $9,427.05 d. $16,199.40
Transcribed Image Text:Assume that Win Co. is considering disposing of equipment that cost $74,582.00 and has $52,207.40 of accumulated depreciation to date. Win Co. can sell the equipment through a broker for $30,681.00 less 5% commission. Alternatively, But Co. has offered to lease the equipment for five years for a total of $48,245.00. Win will incur repair, insurance, and property tax expenses estimated at $9,671.00. At lease end, the equipment is expected to have no residual value. Determine the net differential income from the lease alternative. a. $29,146.95 b. $48,245.00 c. $9,427.05 d. $16,199.40
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