Doug bradford owned a restaurant and an adjoining parking lot. the city of medford has been working on a project to prevent flooding in the area of doug’s restaurant. the city wants to use a portion of doug’s parking lot as part of its water diversion project. doug says that he would rather cope with the flooding than lose the 10 parking spaces the city’s diversion project would use. what is correct?

You are the manager of a large crude-oil refinery. as part of the refining process, a certain heat exchanger (operated at high temperatures and with abrasive material flowing through it) must be replaced every year. the replacement and downtime cost in the first year is $165 comma 000. this cost is expected to increase due to inflation at a rate of 7% per year for six years (i. e. until the eoy 7), at which time this particular heat exchanger will no longer be needed. if the company's cost of capital is 15% per year, how much could you afford to spend for a higher quality heat exchanger so that these annual replacement and downtime costs could be eliminated?