A bakery needs to replace its old oven that has broken. It is considering the following options. Use MARR=8%.

	Oven A	Oven B
Initial Cost	$4500	$7000
Annual operating cost	$700	$500
Salvage Value	$1000	$1500
Useful Life	4 years	6 years

a) When the useful lives of alternatives differ, we can use the _____ of their useful lives if we are doing present worth analysis

Greater common divisor

Least common multiple

An analysis period that is equal to any of the alternatives' lives

The longest period from the alternatives

b) Based on your answer in part a, what would be the analysis period we would need for this problem?

c) If we do annual worth analysis instead of present worth analysis when alternatives have unequal useful lives, we -

Still need to compute and use the answer in part a

Do not need to use the answer from part a, if we assume identical replacements

Cannot compute the annual worth analysis

d) What is the annual equivalent cost for oven A using the useful life? Round to the nearest integer

e) The do-nothing alternative is a viable option in this problem

True

False

f) Which oven should be purchased?

Oven A

Oven B

None

g) If the annual worth is positive, the present worth is

Positive

Negative

Zero

Cannot be determined without any data