A construction company engaged in constructing sewage treatment plant is considering the economics of furnishing an in-house water-testing lab instead of sending samples to independent labs for analysis. If the lab is furnished so that all the tests can be conducted in-house, the initial cost will be ` 1,250,000. A technician will be required at a cost of ` 650,000/year. The cost of power, chemicals, etc., will be ` 250 per sample. If it is partially furnished, then initial cost will be ` 500,000 and a part-time technician at ` 250,000 per year. The cost of in-house analysis is

` 150/sample, but since all tests cannot be conducted by the company, outside testing will be required at the cost of ` 1,000 per sample. If the company elects to continue with the present condition of outside testing, the cost will be ` 1,750 per sample. If the lab equipment will have a useful life of 12 years and the company’s MARR is 10 per cent/year, how many samples must be tested each year in order to justify (1) the complete lab system and (2) the partial lab system? If the company expects to test 175 samples per year, which alternative among the three should be selected?