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  1. business
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  3. lease or sell assume a company has equipment with

Lease or Sell Assume a company has equipment with a book value of $100,000 (cost...

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Accounting

Lease or Sell Assume a company has equipment with a book value of $100,000 (cost of $140K less A/D of $40K). The Company can sell the equipment through a broker for $90,000 less a 10% commission fee. Alternatively, the Company could lease the equipment to another party for 7 years at a price of $200,000. At the end of the seven years, the equipment is expected to have no residual value (book value of $0). If the equipment is leased, the Company will incur estimated expenses of $5,000 every year for the next five years for maintenance, insurance and taxes

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