Answer:
The best option is to lease the building since the differential income is $30,000 higher ($230,000 > $200,000)
Explanation:
To determine which option is better we must find the differential income for the two options:
- differential revenue:
leasing the building selling the building
$50,000 x 5 years = $250,000 $200,000
- differential costs:
leasing the building selling the building
$4,000 x 5 years = $20,000 $0
- differential income:
leasing the building selling the building
$250,000 - $20,000 = $230,000 $200,000
