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1) Penny Construction Company is considering selling excess equipment with a book value of $11,000 (original cost of $20,000 less accumulated depreciation of $9,000) for $8,000 less a 10% brokerage commission. Alternatively, the machinery can be leased to another company for a total of $9,000 for five years, after which it is expected to have no residual value. During the period of the lease, Penny Construction Company's costs of repairs, insurance, and property tax expenses are expected to be $2,000. Which cost can be ignored in a decision matrix for differential analysis?

Group of answer choices

the $11,000 book value of the equipment

the $8,000 selling price of the equipment

the $9,000 rent for leasing the equipment

the $2,000 cost of repairs, insurance, and property tax with the lease

2)

Daniel Lumber Company incurs a cost of $45 per hundred board feet in processing certain "rough-cut" lumber, which it sells for $51 per hundred board feet. An alternative is to produce a "finished-cut" at a total processing cost of $55 per hundred board feet, which can be sold for $72 per hundred board feet. Which two amounts are used to calculate differential revenue when further processing is chosen?

Group of answer choices

$72 - $51

$72 - $55

$51 - $45

$55 - $45

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