Two manufacturers supply MRI systems for medical imaging. St. Judes Hospital wishes to replace its current MRI equipment that was purchased 8 years ago with the newer technology and cl arity of a state of - the - art system. System K will have a fi rst cost of $1,600,000, an operating cost of $70,000 per year, and a salvage value of $400,000 after its 4 - yea r life. System L will have a fi rst cost of $2,100,000, an o perating cost of $50,000 the fi rst 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?