SHOW ME HOW Obj. 1 Sloan Corporation is considering new equipment. The equipment can be purchased from an overseas suppl

[answerhappygod]

Show Me How Obj 1 Sloan Corporation Is Considering New Equipment The Equipment Can Be Purchased From An Overseas Suppl 1 (229.43 KiB) Viewed 79 times

SHOW ME HOW Obj. 1 Sloan Corporation is considering new equipment. The equipment can be purchased from an overseas supplier for $125,500. The freight and installation costs for the equipment are $1,600. If purchased, annual repairs and maintenance are estimated to be $2,500 per year over the five-year useful life of the equipment. Alternatively, Sloan can lease the equipment from a domestic supplier for $30,000 per year for five years, with no additional costs. Prepare a differential analysis dated December 3 to determine whether Sloan should lease (Alternative 1) or purchase (Alternative 2) the equipment. Hint: This is a “lease or buy” decision, which must be analyzed from the perspective of the equipment user, as opposed to the equipment owner.