You and your partner have become very interested in cross-country motorcycle racing and wish to purchase entry-level equipment. You have identified two alternative sets of equipment and gear. Package K has a first cost of $150,000, an operating cost of $5,000 per quarter, and a salvage value of $30,000 after its 2-year life. Package L has a first cost of $240,000 with a lower operating cost of $3,200 per quarter and an estimated $20,000 salvage value after its 4-year life. Which package offers the lower present worth analysis at an interest rate of 8% per year, compounded quarterly?

The present worth of package K is $and that of package L is $.

(Click to select Package L or Package K) offers the lower present worth.