Differential analysis for a lease-or-sell decisionmatrix construction company is considering selling excess machinery with a book value of $75,000 (original cost of$200,000 less accumulated depreciation of $125,000) for $60,000 less a 5% brokerage commission. alternatively, themachinery can be leased to another company for a total of $75,000 for five years, after which it is expected to have noresidual value. during the period of the lease, matrix construction company’s costs of repairs, insurance, and property taxexpenses are expected to be $21,500.a. prepare a differential analysis dated may 25 to determine whether matrix should lease (alternative 1) or sell (alternative2) the machinery. b. on the basis of the data presented, would it be advisable to lease or sell the machinery? explain.

In each of the cases below, assume division x has a product that can be sold either to outside customers or to division y of the same company for use in its production process. the managers of the divisions are evaluated based on their divisional profits. case a b division x: capacity in units 200,000 200,000 number of units being sold to outside customers 200,000 160,000 selling price per unit to outside customers $ 90 $ 75 variable costs per unit $ 70 $ 60 fixed costs per unit (based on capacity) $ 13 $ 8 division y: number of units needed for production 40,000 40,000 purchase price per unit now being paid to an outside supplier $ 86 $ 74 required: 1. refer to the data in case a above. assume in this case that $3 per unit in variable selling costs can be avoided on intracompany sales. a. what is the lowest acceptable transfer price from the perspective of the selling division? b. what is the highest acceptable transfer price from the perspective of the buying division? c. what is the range of acceptable transfer prices (if any) between the two divisions? if the managers are free to negotiate and make decisions on their own, will a transfer probably take place?