Vicky Torres and Juanita Alva were the first in line at Best Buy during a Black Friday sale so that they could secure a large-screen TV, which was normally $499 and was advertised on sale at $199. Because they arrived three weeks early, they ended up waiting in line for a total of 500 hours! The authors of your textbook found their choice puzzling because of the high opportunity cost in this scenario. The authors say:

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?