• Lucca Inc. is a popular family owned pizzeria and the owners are considering selling its existing gas pizza oven and replacing it will a new wood-burning pizza oven for its business. The cost of the new over would be $10,000. The new oven is more efficient, has a larger capacity, and it would reduce the time to cook a pizza.
• Lucca Inc. is also considering expanding its operations by purchasing another pizzeria located in nearby area with minimal competition. It would cost $200,000. Expected annual cash flow is $75,000 and the expected annual net income is $55,000.
• Based on the two potential investments above, discuss which analysis method you would use to evaluate the viability of each decision. (Address each investment independently)
• What additional information could be relevant to help with your analysis.