Dune is a product of the digby company. digby's sales forecast for dune is 505 units. digby wants to have an extra 10% of units on hand above and beyond their forecast in case sales are better than expected. (they would risk the possibility of excess inventory carrying charges rather than risk lost profits on a stock out.) taking current inventory into account, what will dune's production after adjustment have to be in order to have a 10% reserve of units available for sale?

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?