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Grandma'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: (Click
Grandma'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: (Click the icon to view the information related to the old and new ovens.) Read the requirements. SKIP REQUIREMENTS 1&2 Requirement 3. Should Grandma's Bakery purchase the new oven? Provide support for your answer. Begin by selecting the relevant items and then entering the appropriate cost in each respective column. Be sure to total the relevant costs. (If an input field is not used in the table, leave the input field empty; parentheses for any costs.) Based on the calculations above, Grandma's Bakery purchase the new oven. 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 2 years later? Requirement 3. Should Grandma's Bakery purchase the new oven? Provide support for your answer. Begin by selecting the relevant items and then entering the appropriate cost in each respective column. Be sure to total the relevant costs. (It an input field is not used 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 net cost difference is minimal. This might reflect badly on him for purchasing the oven 2 years ago, when the new oven is available just 2 years later. Data table
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