Bulls, Inc. can sell a large piece of machinery for $90,000. The machinery originally cost $240,000 and has accumulated depreciation of $130,000. Bulls will have to pay a 5% sales commission on the sale. Rather than sell, Bulls is considering leasing the machine. It can be leased for 4 years for $24,000 per year. Bulls has estimated future operating expenses to be $3,000 per year, and Bulls will be responsible for those expenses. Which of the following options most accurately describes the analysis and decision for BullsA. Lease - because differential revenues are $6,000 if Bulls leases rather than sellsB. Lease - because Bulls will lose $20,000 if it sells the equipment for less than its $110,000 book valueC. Sell - because differential income of selling rather than leasing is $6,000D. Sell - because differential income is $1,500 if Bulls sells rather than leases
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