Assume That Vivid Co

Multiple Choice

Assume that Vivid Co.is considering disposing of equipment that cost $350,000 and has $280,000 of accumulated depreciation to date.Vivid Co.can sell the equipment through a broker for $135,000 less 5% commission.Alternatively, Comet Co.has offered to lease the equipment for five years for a total of $235,000.Vivid will incur repair, insurance, and property tax expenses estimated at $60,000.At lease-end, the equipment is expected to have no residual value.The net differential income from the lease alternative is:

A) $135,000.
B) $235,000.
C) $100,000.
D) $46,750.