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Data Table Old Oven New Oven Original cost Accumulated depreciation $ 22,000 $ 41,000 6,400 Book value 28,000 Current disposal value Installation cost Annual operating

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Data Table Old Oven New Oven Original cost Accumulated depreciation $ 22,000 $ 41,000 6,400 Book value 28,000 Current disposal value Installation cost Annual operating cost Useful life $ 25,000 Not applicable $ 14,000 $ 7 years 3 years 4 years 0 $ Not acquired yet Not acquired yet Not acquired yet 2,600 7,000 4 years O years 4 years Current age he tal Remaining useful life Terminal disposal value in 5 years) 0 Requirement 1 and 2. Which of the costs and benefits above are relevant to the decision to replace the oven? What information is relevant? Why is meer? Begin by determining whether each tem is relevant or irrelevant for this decisionit antem is relevant select why it is relevant (Make action for each item in the Old Oven and New Over ons in the "Why vrou, only make a selection for investme. For relevant to have the outfield blank, do not selectabl) Old Oven New Oven Why Irrelevant Original com Accumulated depreciation Book value Current disposal Installation cost Annual operating cost Terminal disposal Requirement 3. Should Grandma's Bakery purchase the new owes? Provide support for your answer logis by electing the relevant toms and then entering the appropriate cost in each respective colum. Be sure to other events and is not used in the line the input id eroty, do restantes or parentheses for any costs) Keep old oven Nov Total Total Total relevant costs Based on the actions above. Grandma's Bakery purchase the even Requirement 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 only two years later Requirements. At what purchase price would Grandma's Bakery be indifferent between purchasing the new and continuing to use the old over Grandma's Bakery would be different between purchasing the woven and keeping the old even at a purchase Requirement 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 se the old oven? If bonuses are paid on cost control, managers will look for cost savings options, without regard to capital outlays year after year The higher annual operating costs of the new oven suggest the original purchase was a good choice The lower annual operating costs of the new oven suggest the original purchase was a poor choice The manager will be indifferent to the decision because the not cost difference is minimal This might reflect badly on him for purchasing the oven two years ago, when the new oven is available just two years later This reflects well on the manager, as it shows he is always willing to look for cost savings Requirement 5. At what purchase price would Grandma's Bakery be indifferent between purchasing the new oven and continuing to use the old oven? Grandma's Bakery would be indifferent between purchasing the new oven and keeping the old oven at a purchase price of Choose from any list or enter any number in the input fields and then continue to the next question. Data Table Old Oven New Oven Original cost Accumulated depreciation $ 22,000 $ 41,000 6,400 Book value 28,000 Current disposal value Installation cost Annual operating cost Useful life $ 25,000 Not applicable $ 14,000 $ 7 years 3 years 4 years 0 $ Not acquired yet Not acquired yet Not acquired yet 2,600 7,000 4 years O years 4 years Current age he tal Remaining useful life Terminal disposal value in 5 years) 0 Requirement 1 and 2. Which of the costs and benefits above are relevant to the decision to replace the oven? What information is relevant? Why is meer? Begin by determining whether each tem is relevant or irrelevant for this decisionit antem is relevant select why it is relevant (Make action for each item in the Old Oven and New Over ons in the "Why vrou, only make a selection for investme. For relevant to have the outfield blank, do not selectabl) Old Oven New Oven Why Irrelevant Original com Accumulated depreciation Book value Current disposal Installation cost Annual operating cost Terminal disposal Requirement 3. Should Grandma's Bakery purchase the new owes? Provide support for your answer logis by electing the relevant toms and then entering the appropriate cost in each respective colum. Be sure to other events and is not used in the line the input id eroty, do restantes or parentheses for any costs) Keep old oven Nov Total Total Total relevant costs Based on the actions above. Grandma's Bakery purchase the even Requirement 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 only two years later Requirements. At what purchase price would Grandma's Bakery be indifferent between purchasing the new and continuing to use the old over Grandma's Bakery would be different between purchasing the woven and keeping the old even at a purchase Requirement 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 se the old oven? If bonuses are paid on cost control, managers will look for cost savings options, without regard to capital outlays year after year The higher annual operating costs of the new oven suggest the original purchase was a good choice The lower annual operating costs of the new oven suggest the original purchase was a poor choice The manager will be indifferent to the decision because the not cost difference is minimal This might reflect badly on him for purchasing the oven two years ago, when the new oven is available just two years later This reflects well on the manager, as it shows he is always willing to look for cost savings Requirement 5. At what purchase price would Grandma's Bakery be indifferent between purchasing the new oven and continuing to use the old oven? Grandma's Bakery would be indifferent between purchasing the new oven and keeping the old oven at a purchase price of Choose from any list or enter any number in the input fields and then continue to the next

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