Purpose: You will analyze the impact of a constrained resource on NOI as well as evaluate the purchase of a capital asset and make recommendations to management. Upon successful completion of this project you will (1) better understand how to determine if a resource is constrained, apply skills to analyze products and evaluate how to maximize NOI and (2) apply skills to analyze and evaluate the purchase of a capital asset. Task: Work within your team. Review Mr. Puffins Muffins operation. Assuming a new oven is purchased, determine which muffin should be selected to maximize NOI for the new oven. Based on the muffin selection, determine the NPV for the new oven and finally discuss potential other options for Mr. Puffins investment. Criteria for Deliverable: Individually prepare a 1-2 page memo addressed to Mr. Puffin. The memo should NOT be overly technical and should use the format below and address the following: 1. Memo format: a. Date b. Salutation (addressed to Mr. Puffin) c. Body (this is where you address the questions posed) d. Closing/signature 2. Provide a recommendation to Mr. Puffin for the use the excess cash purchase the new oven, (or something else) and why. 3. If a new oven is purchased, provide a recommendation to Mr. Puffin as to which muffin type should be baked in it and why. Mr. Puffin has been seeing crazy demand for every kind of muffin he has been selling. He does not want to disrupt his customer base by charging more or changing how much of what he currently produces. However, Mr. Puffin has accumulated some excess cash because of his recent success. As a result, he wants to put his money to good use. He is considering investing in a new state of the art oven for $50,000. This oven will be operated for 270 days out of the year for 8 hours a day. It will have a useful life of 10 years. It has an annual maintenance expense of $4,000. Additionally, it will require recalibration in year 5 costing $6,000 and has a salvage value of $20,000. Mr. Puffins Muffins has a cost of capital of 8%. Before deciding whether the investment is a good one, Mr. Puffin needs to decide what his oven will be used for. He is thinking about using the oven for additional ooey-gooey chocolate chip muffins (CC), brown butter cranberry muffins (CR), or blueberry muffins (BB). A batch of CC muffins yield 16 muffins. They take 4 hours to bake and have a contribution margin of $2 per muffin. A batch of CR muffins yield 10 muffins. They take 2 hours to bake and have a contribution margin of $1.50 per muffin. BB muffins yield 12 muffins. They take 1 hour to bake and have a contribution margin of $0.50 per muffin.