Posted: February 6th, 2021

Your boss has todl you to evaluate two ovesns for tink-the tinkers, a

Your boss has todl you to evaluate two ovesns for tink-the tinkers, a gourment sanwhich shop. After some questionin of vendors and recipt of specifications, you are assured that the ovens have the attributes and cost shown in the folloiwng table. the following 2 assuptions are appropriate: 1. the life of each machine 5 years 2. the company think it know shot to make 14% on investments no more risky than this one:

Three Small ovens at 1.250 Two large ovens at \$2500
original cost 3750 5000
Labor Per Year
in excess of large
models \$750(total)
Cleaning/ Maintenance \$750(250each) \$400(200 each)
Salvage Value \$750(250 each) \$1,000(500 each)
A) Determine via the present value method which machine to tell your boss to pruchase
B) what assumption are you making about the ovens?
C)what assuptions are you making in your methodlogy

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