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What net differential profit from the sell alternative is

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Keating Co. is considering disposing of equipment that cost $79,000 and has $55,300 of accumulated depreciation to date. Keating Co. can sell the equipment through a broker for $31,000 less a 8% commission. Alternatively, Gunner Co. has offered to lease the equipment for five years for a total of $49,000. Keating will incur repair, insurance, and property tax expenses estimated at $8,000 over the five-year period. At lease-end, the equipment is expected to have no residual value.

Question 1: The net differential profit or loss from the sell alternative is a

a. $14,976 profit

b. $8,736 loss

c. $18,720 profit

d. $12,480 loss

Reference no: EM132589880

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