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Manufacturing needs to obtain a gear-cutting machine




Badonsky Manufacturing needs to obtain a gear-cutting machine, which can be purchased for $75,000. Badonsky estimates that repair, maintenance, insurance, and property tax expense will be $20,000 for the machine's 5-year life. At the end of the machine's life, it will have no salvage value.;As an alternative, Badonsky can lease the machine for 5 years for $18,000 per year. If the machine is leased, Badonsky is required to pay only for routine maintenance on the machine, which is estimated to be $8,000 over the machine's life. All other costs will be paid by the lessor. Prepare a differential analysis to determine whether Badonsky should purchase or lease the machine.;My teacher is A STICKLER for showing ALL work and steps. It's only extra credit, but there are no examples in our book that I can find!


Paper#27037 | Written in 18-Jul-2015

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