1. 2. 3. Inman Construction Company is considering...
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Inman Construction Company is considering selling excess machinery with a book value of $282,500 original cost of $400,500 less accumulated depreciation of $118,000 for $277,900, less a 5% brokerage commission. Alternatively, the machinery can be leased for a total of $287,700 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 $25,900. Hide a. Prepare a differential analysis, dated January 3, 2014, to determine whether Inman should lease (Alternative 1) or sell (Alternative 2) the machinery Differential Analysis Lease Machinery (Alt.1) or Sell Machinery (Alt.2) January 3, 2014 Lease Machinery (Alternative 1) Sell Machinery (Alternative 2) Differential Effect on Income (Alternative 2 Revenues Costs Income (Loss) b. On the basis of the data presented, would it be advisable to lease or sell the machinery? Select
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