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What is the final Answer that is left Blank? Grandma's Bakery is thinking about replacing the convection oven with a new, more energy-efficient model. Information
What is the final Answer that is left Blank?
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: E: (Click the icon to view the information related to the old and new ovens.) Read the requirements 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 enter a zero. Use a minus sign or parentheses for any costs.) Data table Keep old oven New oven Total Total $ Old Oven New Oven Current disposal value (market value) Original cost (purchase price) 8,000 (43,000) $ 28,000 $ 6,700 Installation cost S (2,700) (35.000) S (77,000) Operating cost for 7 years $ 43,000 Not acquired yet Not acquired yet Not acquired yet 2,700 5,000 (77,000) $ (72,700) Total relevant costs S 12,000 $ 8,000 Not applicable $ $ S 11,000 S 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 7 years) Based on the calculations above, Grandma's Bakery should purchase the new oven 10 years 7 years 3 years Requirement 4. Is there any conflict between the decision model and the incentives of the manager who has purchased This might reflect badly on him for purchasing the oven 3 years ago, when the new oven is available just 3 years later, 3 The lower annual operating costs of the new oven suggest the original purchase was a poor choice. O years 7 years 7 years 0 $ $ 0 Requirement 5. At what purchase price would Grandma's Bakery be indifferent between purchasing the new oven and Grandma's Bakery would be indifferent between purchasing the new oven and keeping the old oven at a purchase price of Print Done Help me solve this Etext pages Get more helpStep by Step Solution
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