Solution:
Lease Equipment (Alt. 1) or Buy Equipment (Alt. 2) | |||
4-Aug | |||
Particulars | Lease Equipment (Alternative 1) | Buy Equipment (Alternative 2) | Differential Effect on Income (Alternative 2) |
Revenues | $0.00 | $0.00 | $0.00 |
Costs: | |||
Purchase Price | $0.00 | $3,040.00 | $3,040.00 |
Freight and Installation | $0.00 | $660.00 | $660.00 |
Repair and Maintenance | $0.00 | $1,680.00 | $1,680.00 |
Lease (4 Years) | $6,080.00 | $0.00 | -$6,080.00 |
Income (loss) | -$6,080.00 | -$5,380.00 | $700.00 |
Company should buy the equipment.
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