Finch, Inc has bought a new server and is having to decide what to do with the old one. The cost of the old server was originally $60,000 and has been depreciated $45,000. The company has received two offers that it must consider. One offer was made to purchase the equipment outright for $18,500 less a 5% sales commission. The other offer was to lease the equipment for $7,000 for the next five
years but the company will be required to provide maintenance and insurance totaling $3,000 per year. What offer should Finch, Inc accept?
A) $2,425 in favor of leasing
B) Reject both offers
C) $11,500 in favor of selling
D) $16,500 in favor of leasing
A
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