2. inputs and outputs yvette's performance pizza is a small restaurant in detroit that sells gluten-free pizzas. yvette's very tiny kitchen has barely enough room for the four ovens in which her workers bake the pizzas. yvette signed a lease obligating her to pay the rent for the four ovens for the next year. because of this, and because yvette's kitchen cannot fit more than four ovens, yvette cannot change the number of ovens she uses in her production of pizzas in the short run. however, yvette's decision regarding how many workers to use can vary from week to week because her workers tend to be students. each monday, yvette lets them know how many workers she needs for each day of the week. in the short run, these workers arevariable inputs, and the ovens arefixed inputs.

The gilbert instrument corporation is considering replacing the wood steamer it currently uses to shape guitar sides. the steamer has 6 years of remaining life. if kept, the steamer will have depreciaiton expenses of $650 for five years and $325 for the sixthyear. its current book value is $3,575, and it can be sold on an internet auction site for$4,150 at this time. if the old steamer is not replaced, it can be sold for $800 at the endof its useful life. gilbert is considering purchasing the side steamer 3000, a higher-end steamer, whichcosts $12,000 and has an estimated useful life of 6 years with an estimated salvage value of$1,500. this steamer falls into the macrs 5-year class, so the applicable depreciationrates are 20.00%, 32.00%, 19.20%, 11.52%, 11.52%, and 5.76%. the new steamer is fasterand allows for an output expansion, so sales would rise by $2,000 per year; the newmachine's much greater efficiency would reduce operating expenses by $1,900 per year. to support the greater sales, the new machine would require that inventories increase by$2,900, but accounts payable would simultaneously increase by $700. gilbert's marginalfederal-plus-state tax rate is 40%, and its wacc is 15%.a. should it replace the old steamer? b. npv of replace = $2,083.51