The nursery provides three meals (a breakfast, a snack, and a lunch) which cost the nursery RO 1.5 per meal. There are seven children currently enrolled In 2021, the nursery started its first year of operations. During the first month of operations, the cooker and oven stopped working and can be sold both at scrap for RO 70. Both were from Amal's old house and cost the family 8 years ago RO 800 for both with an estimated useful life of 7 years at the time. The appliances are important for the nursery to prepare the healthy food for the children. A reliable, small business offered the nursery to prepare the food for the children every working day for RO 600 per month, but the nursery must arrange for picking up the food everyday themselves (which may cost additional RO 60 per month) or arrange for delivery which can cost RO 90 per month. The other alternative is for Amal and Fatma to purchase a new cooker and an oven. The cost of the appliances is: cooker RO 255 and oven RO 380 and installation cost RO 40. Both appliances are expected to last 9 years. According to the manufacturer both appliances will increase the utility bill by RO 300 per year. Based on the information provided, what information is relevant and irrelevant to the decision to purchase the appliances? And Why? NITED STATES)
The nursery provides three meals (a breakfast, a snack, and a lunch) which cost the nursery RO 1.5 per meal. There are seven children currently enrolled In 2021, the nursery started its first year of operations. During the first month of operations, the cooker and oven stopped working and can be sold both at scrap for RO 70. Both were from Amal's old house and cost the family 8 years ago RO 800 for both with an estimated useful life of 7 years at the time. The appliances are important for the nursery to prepare the healthy food for the children. A reliable, small business offered the nursery to prepare the food for the children every working day for RO 600 per month, but the nursery must arrange for picking up the food everyday themselves (which may cost additional RO 60 per month) or arrange for delivery which can cost RO 90 per month. The other alternative is for Amal and Fatma to purchase a new cooker and an oven. The cost of the appliances is: cooker RO 255 and oven RO 380 and installation cost RO 40. Both appliances are expected to last 9 years. According to the manufacturer both appliances will increase the utility bill by RO 300 per year. Based on the information provided, what information is relevant and irrelevant to the decision to purchase the appliances? And Why? NITED STATES)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The nursery provides three meals (a breakfast, a snack, and a lunch) which cost the nursery
RO 1.5 per meal. There are seven children currently enrolled
In 2021, the nursery started its first year of operations. During the first month of operations,
the cooker and oven stopped working and can be sold both at scrap for RO 70. Both were
from Amal's old house and cost the family 8 years ago RO 800 for both with an estimated
useful life of 7 years at the time. The appliances are important for the nursery to prepare the
healthy food for the children. A reliable, small business offered the nursery to prepare the
food for the children every working day for RO 600 per month, but the nursery must arrange
for picking up the food everyday themselves (which may cost additional RO 60 per month) or
arrange for delivery which can cost RO 90 per month. The other alternative is for Amal and
Fatma to purchase a new cooker and an oven. The cost of the appliances is: cooker RO 255
and oven RO 380 and installation cost RO 40. Both appliances are expected to last 9 years.
According to the manufacturer both appliances will increase the utility bill by RO 300 per
year.
Based on the information provided, what information is relevant and irrelevant to the
decision to purchase the appliances? And Why?
NITED STATES)
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