Your boss has told you to evaluate two ovens for Tink the-Tinkers, a gourmet sandwich shop. After some questioning of vendors and receipt of specifications, you are assured that the ovens have the attributes and costs shown in the following table. The following two assumptions are appropriate:

1. The life of each machine is 5 years.

2. The company thinks it knows how to make 14% on investments no more risky than this one.

a) Determine via the present value method which machine to tell your boss to purchase.

b) What assumption are you making about the ovens?

Expenses	Three Small Ovens at $1,250 each	Two Large ovens at $2,500 each
Original Cost	$3,750	$5,000
Labor per year	$750 (total)
Maintenance per year	$750 ($250 each)	$400 ($200 each)
Salvage Value	$750 ($250 each)	$1,000 ($500 each)