Cupcake Bakery is thinking about replacing the convection oven with a new, more energy-efficient model. Information related to the old and new ovens follows: Click the icon to view the information related to the old and new ovens.) Read the requirements. Requirement 1 and 2. Which of the costs and benefits above are relevant to the decision to replace the oven? What information is irrelevant? Why is it irrelevant? Begin by determining whether each item is relevant or irrelevant for this decision. If an item is irrelevant, select why it is irrelevant. (Make a selection for each item in the Old Oven and New Oven columns. In the "Why Irrelevant" column, only make a selection for irrelevant items. For relevant items, leave the box blank do not select a label.) Old Oven New O Original cost Accumulated depreciation Book value Current disposal value Installation cost Annual operating cost Terminal disposal value Edit Table Cancel Data Table Old Oven le New Oven Original cost $20,000 $46,000 Accumulated depreciation $6,500 Not acquired yet u Book value $14,000 Not acquired yet ar y Current disposal value $10,000 Not acquired yet e ank Installation cost Not applicable $2,700 Annual operating cost WO $20,000 $14,000 n Useful life 9 years 7 years an Current age 2 years O years Remaining useful life 7 years 7 years Terminal disposal value (in 5 years) $0 $o 11 Ignore the effect of income taxes and the time value of money, D Cancel Requirements Ques upc hode a(CI 1 Which of the costs and benefits above are relevant to the decision to replace the oven? ead equ ven What information is 2. irrelevant? Why is it irrelevant? egir elec Why o nc le ank Should Cupcake Bakery purchase the 3. new oven? Provide support for your answer w rigin ccun 4 Is there any conflict between the decision model and the incentives of the manager who has purchased the "old" oven and is considering replacing it only two years later? ook urrel stall At what purchase price would Cupcake Bakery be indifferent 5. between purchasing the new oven and continuing to use the old oven? nnus ermit