QUESTION 1 (40%) One (1) of the four (4) ovens at Cardinal Bakery is being considered for replacement Its salvage value and maintenance costs are $80,000, and this price includes a complete guarantee of the maintenance costs for the first two (2) years, and a good portion of Years 3 and 4 maintenance costs. Its salvage value and maintenance costs are also given in the table on the next page given in the table below (next page). A new oven costs Both the old and new ovens have similar productivities and energy costs. Should the oven be replaced this year if the Cardinal Bakery-required MARR is 10%? Use a before-tax analysis. New Oven Old Oven Market Value / Market Value / Year Maintenance Costs Maintenance Salvage Value (@ end of Year Salvage Value (@ end of Year) Costs $20,000 $9,500 $17,000 $75,000 1 $14,000 $9,600 $70,000 2 $9,700 $11,000 $66,000 3 $1,000 $9,800 $7,000 $62,000 $3,000