E11-32 (similar to) E Question Help 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 esquirements. 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 whethe each item is relevant or irrelevant tor this decision. If an item is irelevant, select wny it is irelevant. Make a selection tor each item in the Old Oven and New Oven columns. In the "Why lrelevant column, only make a selection for irrelevant items. For relevant items, leave the box blank; do not select a label.) Old Oven New Oven Why Irrelevant Original cost Data Table Book value Current disposal value Installation cost Old Oven Annual operating cost New Oven Terminal diaposal value Original cost 27,000 $ 48,000 6,500 Not acquired yet Book value 16,000 Not acquired yet Current disposal value 11,000 Not acquired yet Not applicable $ Installation cos 2,900 of the costs and benefits above are relevant to the cecision to replace the 14,000 $ oven? Annual operating cost 2. What information is irrelevant? Why is it irrelevant? Useful life 10 years 7 years 3. Should Cupcake Bakery purchase the new oven? Provide aupport for your anawer Current age 0 years years 4. Is there any confict between the decisian model and the incentives of the manager who has purchased the 'old" oven and is considering replacing it anly two years later? Choase from any drap-dawn list and then click 7 years Remaining useful life 7 years 5. At what purchase price would Cupcake Bakery be indifferent between purchasing the Terminal disposal value (in 7 years) oven and continuing to use the old oven? remalning Ignore the effect of income taxes and the time valuc of moncy