31) The costs and revenues associated with two alternatives are listed below: Alternative 1 Alternative 2 Projected revenue $ 100,000 $ 125,000 Unit-level costs 20,000 30,000 Batch-level costs 20,000 25,000 Product-level costs 15,000 15,000 Facility-level costs 10,000 10,000 Which alternative should be selected based on this information

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?