Your clinic is considering buying a two- module GeneXpert System from Cepheid for TB testing. The cost for the equipment is $2,000 with a one-year warranty (replaced if any problem) Your clinic has a 10-year planning period, so it wants to be able to provide TB tests over the next 10 years. With a 10% discount rate, please estimate an annual equivalent cost for this eguuipment under tbe fellowing scenario:

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Your clinic is considering buying a two-
module Genexpert System from Cepheid for
TB testing.
The cost for the equipment is $2,000 with a
one-year warranty (replaced if any problem)
Your clinic has a 10-year planning period, so
it wants to be able to provide TB tests over
the next 10 years. With a 10% discount rate,
please estimate an annual equivalent cost for
this equipment under the following scenario:
You only buy the equipment (with one-year
warranty) now (time 0). It lasts for slightly
more than 1 year (1 day past the warranty
period). You then have to buy another one
(still $2,000) and it lasts for 3 years. Then buy
another one and it lasts for 1 year (1 day past
warranty), so you have to buy another one
and it lasts for 2 years. And finally, you buy
another one and it lasts for 3 years.
Transcribed Image Text:Your clinic is considering buying a two- module Genexpert System from Cepheid for TB testing. The cost for the equipment is $2,000 with a one-year warranty (replaced if any problem) Your clinic has a 10-year planning period, so it wants to be able to provide TB tests over the next 10 years. With a 10% discount rate, please estimate an annual equivalent cost for this equipment under the following scenario: You only buy the equipment (with one-year warranty) now (time 0). It lasts for slightly more than 1 year (1 day past the warranty period). You then have to buy another one (still $2,000) and it lasts for 3 years. Then buy another one and it lasts for 1 year (1 day past warranty), so you have to buy another one and it lasts for 2 years. And finally, you buy another one and it lasts for 3 years.
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