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Assume a company has equipment with a book value of $60000 The Company can sell the equipment through a broker for $90000 less a 4% commission fee

Assume a company has equipment with a book value of $60,000 The Company can sell the equipment through a broker for $90,000 less a 4% commission fee Alternatively, the Company could lease the equipment to another party for 3 years at a price of $130,000 At the end of the three 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 $12,000 over the three years for maintenance, insurance and taxes

Calculate the differential net income and make a statement explaining why the company should lease or sell

Mar 24 2020 Read more Less More

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