Q4. (20 marks) FleshSlice Lonsdale Inc. replaced the convection oven just six months ago. Today,...
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Q4. (20 marks) FleshSlice Lonsdale Inc. replaced the convection oven just six months ago. Today, Commercial Ovens Manufacturing announced the availability of a new convection oven that cooks more quickly with lower operating expenses. The company is considering the purchase of this faster, lower-operating cost convection oven to replace the existing one they recently purchased. Selected information about the two ovens is given below: ExistingNew Oven Original cost$70,000$67,000 Accumulated depreciation $3,500- Current salvage value$55,000- Remaining life5 years5 years Annual operating expenses$10,000$8,500 Disposal value in 5 years$0$0 I Required: a What costs are sunk? b.What costs are relevant? s. What are the net cash flows over the next 5 years assuming the bakery purchases the new convection oven? What other items should the company consider when making this decision
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