have send this question and iget answer but without steps. please I want full st

Question

have send this question and iget answer but without steps.
please I want full steps.. calculation

2. Two manufacturers supply MRI systems for medical imaging. St. Jude's Hospital wishes to replace its current MRI equipment that was purchased 8 years ago with the newer technology and clarity of a state of- the-art system. System K will have a first cost of $1,600,000, an operating cost of $70,000 per year, and a salvage value of $400,000 after its 4-year life. System L will have a first cost of $2,100,000, an operating cost of $50,000 the first year with an expected increase of $3000 per year thereafter, and no salvage value after its 8-year life. Which system should be selected on the basis of a future worth analysis at an interest rate of 12% per year?

Explanation / Answer

Clearly System K has lower cost after 4 years and therefore should be used by management

USE EXCEL FORMULA 'PV' for all the cost figures

System K Present value after 4 years System L Present value after 4 years FC 1600000 ($133,329) FC 2100000 ($174,994) Operating cost Year 1 70000 ($5,384.62) Operating Cost Year 1 50000 ($3,846.15) Operating cost Year 2 70000 ($5,798.82) Operating Cost Year 2 53000 ($4,390.53) Operating cost Year 3 70000 ($5,830.68) Operating Cost Year 3 56000 ($4,664.54) Operating cost Year 4 70000 ($5,833.13) Operating Cost Year 4 59000 ($4,916.49) Salvage value 400000 ($33,332.17) Operating Cost Year 5 62000 Operating Cost Year 6 65000 Operating Cost Year 7 68000 Operating Cost Year 8 71000 Salvage value 0 Cost of system ($189,508) ($192,812)

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