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Lease or Sell Felix Company owns equipment with a cost of $361,600 and accumulated depreciation...

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Accounting

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Lease or Sell Felix Company owns equipment with a cost of $361,600 and accumulated depreciation of $52,400 that can be sold for $275, 100, less a 5% sales commission. Alternatively, Felix Company can lease the equipment for three years for a total of $286,100, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Felix Company on the equipment would total $16,000 over the three year lease. a. Prepare a differential analysis on August 7 as to whether Felix Company should lease (Alternative 1) or sell (Alternative 2) the equipment. If required, use a minus sign to indicate a loss. Differential Analysis Lease Equipment (Alt. 1) or Sell Equipment (Alt. 2) August 7 Lease Sell Differential Equipment Equipment Effects (Alternative 1) (Alternative 2) (Alternative 2) Revenues Costs Profit (Loss) b. Should Felix Company lease (Alternative 1) or sell (Alternative 2) the equipment

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