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BONUS: Pat, a Pizzeria manager, replaced the convection oven just six months ago. Today, Turbo...

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BONUS: Pat, a Pizzeria manager, replaced the convection oven just six months ago. Today, Turbo Ovens Manufacturing announced the availability of a new convection oven that cooks more quickly with lower operating expenses. Pat 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: New Turbo Oven $50,000 Original cost Accumulated depreciation Current salvage value Remaining life Annual operating expenses Disposal value in 5 years Existing $60,000 $ 5,000 $40,000 5 years $10,000 $0 5 years $ 7,500 $0 Required: a. What costs are sunk? b. What costs are relevant? c. What are the net cash flows over the next 5 years assuming the Pizzeria purchases the new convection oven? d. What other items should Pat, as manager of the Pizzeria, consider when making this decision

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