Answer:
Answer is explained below.
Explanation:
A.
Assume the new testing equipment is rented and installed on December 31 and impact on this year's divisional operating profit
Loss from equipment write-off
Sales revenue	9,820,000    
Operating costs:    
Variable	-1,190,000    
Fixed (cash expenditures)	-4,390,000    
Equipment depreciation	-960,000    
Other depreciation	-710,000    
Loss from equipment write-off	-5,040,000    
Operating profit (loss) before taxes
Operating profit (loss) before taxes=-$2,470,000(Loss)
Loss from equipment write-off= Value of equipment -Equipment Depreciation =$6,000,000-$960,000=$5,040,000
B.
Assume the new testing equipment is rented and installed on December 31. and the impact on next year's divisional operating profit
Sales revenue	9,820,000+690,900=10,510,900	Add 7% of 9,820,000=690,900  
Operating costs:    
Equipment rental	-1,370,000    
Variable	-1,190,000    
Fixed cash expenditures	-4,390,000+263,400=-4,126,600	6%of 4,390,000=263400  
Equipment depreciation	-960,000    
Other depreciation	-710,000    
Operating profit (loss) before taxes	2,154,300(Profit)  
C.
Would you rent the new equipment - Yes Because it is benificial for Company as it is earning profit of $2,154,300