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Differential analysis for a lease or buy decision Differential Analysis for a...

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Accounting

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Differential Analysis for a Lease-or-buy Decision Moffett Industries is considering new equipment. The equipment can be purchased from an overseas supplier for $3,340. The freight and installation costs for the equipment are $640. If purchased, annual repairs and maintenance are estimated to be $380 per year over the 4 -year useful life of the equipment. Alternatively, Moffett Industries can lease the equipment from a domestic supplier for $1,480 per year for 4 years, with no additional costs. a. Prepare a differential analysis dated February 12 to determine whether Molfett Industries should lease (Alternative 1 ) or purchase (Alternative 2) the equipment. (Hint: This is a "lease or buy" decision, which must be analyzed from the perspective of the equipment user, as opposed to the equipment owner.) If an amount is zero, enter " 0. b. Determine whether Moffett should lease (Alternative 1) or buy (Alternative 2) the equipment

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