Engineering Economy 7th Edition by Leland Blank ,Anthony Tarquin

Exercise 14

Mid-Valley Industrial Extension Service, a state-sponsored agency, provides water quality sampling services to all business and industrial firms in a 10-county region. Just last month, the service purchased all necessary lab equipment for full in-house testing and analysis. Now an outsourcing agency has offered to take over this function on a per sample basis. Data and quotes for the two options have been collected. The MARR for government projects is 5% per year, and a study period of 8 years is chosen. Determine the breakeven number of tests between the two options.