The Santa Fe Medical Center plans to purchase a robotic surgery system. There are two alternatives available:
First option costs $250,000 with annual maintenance cost of $20,000 for the first five years and $25,000 per year for the next five years. This system has a total life of 10 years with zero salvage value.
Second option costs $200,000, with an annual maintenance cost of $30,000 for eight years. The second system has a total life of 8 years with zero residual value.
Santa Fe can borrow funds to purchase the system at 3% interest rate. Use Excel to calculate the TVM factor of 3%.

Instructions:1. Calculate the Equivalent Annual Cost for the system.