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ch4aika [34]
2 years ago
12

Lease or Sell Casper Company owns a equipment with a cost of $366,000 and accumulated depreciation of $53,200 that can be sold f

or $273,400, less a 3% sales commission. Alternatively, Casper Company can lease the equipment to another company for three years for a total of $285,200, at the end of which there is no residual value. In addition, the repair, insurance, and property tax expense that would be incurred by Casper Company on the equipment would total $15,100 over the three years.
Prepare a differential analysis on March 23 as to whether Casper Company should lease (Alternative 1) or sell (Alternative 2) the equipment.
Business
1 answer:
aalyn [17]2 years ago
6 0

Answer:

The Company should Lease the equipment (Alternative 1)

Explanation:

Preparation of a differential analysis on March 23 as to whether Casper Company should lease or sell the equipment.

DIFFERENTIAL ANALYSIS

Lease Equipment (Alternative 1); Sell Equipment (Alternative 2) Differential Effect on Income (Alternative 2)

Revenues $285,200 $273,400 –$11,800

Costs –$15,100 –$8,202 $6,898

($273,400*3%=$8,202)

Income (Loss) $270,100 $265,198 $4,902

Therefore Based on the above Differential Analysis the Company should LEASE the equipment (Alternative 1).

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Answer:

D. 9.44%

Explanation:

The computation of the weighted average cost of capital is shown below:

Weighted average cost of capital is

= Cost of debt × (1 - tax rate) × weight of debt + cost of equity × weight of equity

= 8% × (1 - 0.30) × 40% + 12% × 60%

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= 9.44%

Hence, the weighted average cost of capital is 9.44%

Therefore the right option is D.

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3 years ago
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ZanzabumX [31]

Explanation:

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b. On a cold day, both demand for ice cream and the supply of ice cream decrease -  Pp? Q decrease

c. When Hawaii's Mt. Kilauea erupts violently, the demand on the part of tourists for sightseeing flights increases but the supply of pilots willing to provide these dangerous flights decreases- P increase Qq?

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5 0
3 years ago
In which business stage do you decide wether a business opportunity is a god fit for you personally
Kaylis [27]

Identify.

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4 0
3 years ago
What does this word Otorhinolaryngologist mean?
miv72 [106K]

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A medical specialty concerned especially with the ear, nose, and throat and related parts of the head and neck : otolaryngology All antihistamines have at least some drying effects, called anticholinergic properties.

Explanation:

8 0
2 years ago
On January​ 2, 2019, Kaiman Corporation acquired equipment for $ 700,000. The estimated life of the equipment is 5 years or 50,0
Aneli [31]

Answer:

Accumulated depreciation= $276,000

Explanation:

Giving the following information:

On January​ 2, 2019, Kaiman Corporation acquired equipment for $ 700,000. The estimated life of the equipment is 5 years. The estimated residual value is $ 10,000.

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