1 Use Table A to complete Table B TABLE A On Taxable In Up to $27,050 From $27,051 to $65,550 From $65,551 to $136,750 From $136,751 to $297,350 Over $297,350 come The T ax Rate ls 15.0% 27.5% 30.5% 35.5% 39.1% TABLE B Tax Amount Average Tax Rate John Todd Glen Jake Income $52,700 $132,500 $237,000 $315,250

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?