Gertrude's Bakery is thinking about replacing the convection oven with a new, more energy-efficient model.

Information related to the old and new ovens follows:( see yellow highlighted)

Requirement 5.

At what purchase price would Gertrude's Bakery be indifferent between purchasing the new oven and continuing to use the old oven?

Gertrude's Bakery would be indifferent between purchasing the new oven and keeping the old oven at a purchase price of $53,800

How did we get that answer of 53,800? Please briefly show me the calculations.

i Data Table Gertrude's Bakery is thinking about replacing the convection oven with a new, more energy-efficient mode (Click the icon to view the information related to the old and new ovens.) Read the requirements Begin by selecting the relevant items and then entering the appropriate cost in each respective column. parentheses for any costs.) Zero. Use a minu Keep old oven Total New oven Total (41,000) (2,200) 21,000 (30,000) (52 200) Original cost (purchase price) Installation cost Current disposal value (market value) Operating cost for 5 years Original cost Accumulated depreciation Book value Current disposal value Installation cost Annual operating cost Useful life Current age Remaining useful life Terminal disposal value (in 5 years) Old Oven 24,000 $ $ 6,700 28,000 21,000 Not applicable $ $ 13,000 $ New Oven 41,000 Not acquired yet Not acquired yet Not acquired yet 2,200 6.000 5 years O years 5 years (65.000) (65.000) S Total relevant costs 7 years 2 years 5 years 0 $ Based on the calculations above, Gertrude's Bakery should purchase the new oven. $ Requirement 4. Is there any conflict between the decision model and the incentives of the manager who Print Done The lower annual operating costs of the new oven suggest the original purchase was a poor choice. This might reflect badly on him for purchasing the oven two years ago, when the new oven is available jul Requirement 5. At what purchase price would Gertrude's Bakery be indifferent between purchasing the new oven and continuing to use the old oven? Gertrude's Bakery would be indifferent between purchasing the new oven and keeping the old oven at a purchase price of $ 53,800