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Current Designs 7-1 (Part 2) Current Designs faces a number of important decisions that require incremental analysis. Current Designs is always working to identify ways

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Current Designs 7-1 (Part 2) Current Designs faces a number of important decisions that require incremental analysis. Current Designs is always working to identify ways to increase efficiency while becoming more environmentally conscious. During a recent brainstorming session, one employee suggested to Diane Buswell, controller, that the company should consider replacing the current retomoldoven as a way to realize savings from reduced energy consumption. The oven operates on natural gas, using 16.000 therms of natural gas for an entire year. A new, energy efficient rotomold over would operate on 14,100 therms of natural gas for an entire year. After seeking out price quotes from a few suppliers, Diane determined that it would cost approximately $235,000 to purchase a new, energy efficient otomoldoven. She determines that the expected useful fe of the new oven would be 10 years, and it would have no salvage value at the end of its useful life. Current Designs would be able to sell the current ovenfor $9,400 Prepare an incremental analysis to determine ir Current Designs should purchase the new rotomoldoven, assuming that the average price for natural gas over the next 10 years will be $0.70 pertherm. (Enter decrease in net income then enter with a negative sin preceding the number or parenthesis, e.g. -15,000 or (15,000).) Net Income Retain Replace Increase Oven Oven (Decrease) Variable manufacturing costs New oven com Proceeds from scrapping oldoven Current Designs purchase the new rotomoldoven therm, discus Diane is concerned that natural gas prices might increase at a faster rate over the next 10 years. If the company projects that the average natural gas price of the next 10 years could be as how that might change your conclusion in (a) (Enter decrease in net income then enter with a negative sin preceding the number or parenthesis, e.g.-15,000 or (15,000)) Net Income Retain Replace Increase Oven Oven (Decrease) Variable manufacturing costs New even com Proceeds from scrapping oldoven Current Design purchase the new rotomoldoven

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