Memorial Hospital is evaluating two different computer system for handling provider claims. There are no incremental revenues attached to the project, so the decision will be made on the basis of the present value of costs. This firm's corporate cost of capital is 12%. Here are the net cash flow estimate in thousands of dollars. Year 0 1 2 3 System X (S700) (700) (700) (700) System Y ($1,500) (1,500) (1,500) (1,500) A. Assume initially that the both systems have average risk, which one should be chosen. (4 points) B. Assume the System X is judged to have high risk, Allied accounts for differential risk by adjusting its corporate cost of capital up or down by 2 percent. Which system should be chosen and at what interest rate? Why? (6 points)