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The non-profit university hospital is contemplating purchasing a new laboratory blood analysis machine at a...

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Accounting

The non-profit university hospital is contemplating purchasing a new laboratory blood analysis machine at a cost of P1,500,000. Useful life of this machine is 10 years. The hospital currently serves 5,000 patients per year, 40% of whom need this machine's analysis as part of the diagnostic tests. The patient's blood samples are presently sent to a private laboratory that charges P150 per example. In-house variable expenses are estimated to be P85 per sample if the hospital purchases the analysis machine.

Required:

1.The number of tests per year that will cause the university Hospital to be indifferent between purchasing the machine and using the private laboratory are

2.The number of additional patients that would be needed so that the hospital would be indifferent between purchasing the analysis machine and paying the P150 lab charge are

3.The amount of the private laboratory charge so that the hospital would be indifferent as to purchasing the machine or using the private laboratory, assuming the current service level of 5,000 per year is

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