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eBook B4 Show Me How Calculator Differential Analysis for a Lease or Buy Decision Sloan Corporation is considering new equipment. The equipment can be purchased from an overseas supplier for $3,040. The freight and installation costs for the equipment are $610. If purchased, annual repairs and maintenance are estimated to be $400 per year over the four year useful life of the equipment. Alternatively, Sloan can lease the equipment from a domestic supplier for $1,580 per year for four years, with no additional costs. Prepare a differential analysis dated December 3, to determine whether Sloan should lease (Alternative 1) or purchase (Alternative 2) the machine. (Hint: This is a "lease or buy decision, which must be analyzed from the perspective of the machine user, as opposed to the machine owner.) If an amount is zero, enter "O". Use a minus sign to indicate a loss. Differential Analysis Lease Equipment (Alt. 1) or Buy Equipment (Alt. 2) December 3 Lease Equipment (Alternative 1) Buy Equipment (Alternative 2) Differential Effect on Income (Alternative 2) Revenues Costs: Purchase price Freight and installation Repair and maintenance (4 years) Lease (4 years) Income (loss) Determine whether Sloan should lease (Alternative 1) or buy (Alternative 2) the equipment

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