Your institution is considering the purchase of a new analyzer. You have evaluated many models and have narrowed your choice down to two. Both companies offer reagent rental agreements as one purchasing option. The reagent pricing is based on a daily test volume of 300 samples per day. Based on the following information, which instrument and which option (purchase or lease) is the most economical? (10 points) Show all calculations and work.

Instrument 1 Instrument 2

Purchase Lease Purchase Lease

Purchase Price 101,000.00 0.00 98,000.00 0.00

Service Agreement (annual cost) 18,000.00 0.00 20,000.00 0.00

assume contract to be in place

for 4 years

Reagent Cost (calculate reagent 0.95 1.25 1.00 1.30

pricing for a 5 year period)