Inadequate disclosure occurs when: a. a company attempts to overstate assets to make their financial position look better. b. management makes statements that are wrong in its annual report or any other media. c. assets are not written down to their appropriate values because insufficient depreciation is recorded. d. a company understates its liabilities and overstates its revenues and net income.

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?