Determine the equipment pw

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Reference no: EM131807372

The Moo-Cow Dairy may purchase new milking equipment for its milking barn. The equipment costs $135,000. The annual savings due to increased production and decreased labor costs will be $25,000. The equipment requires a minor overhaul every 2 years that costs $5000. At the end of the sixth year, a major overhaul costing $15,000 will be required. The equipment is expected to last 10 years with scheduled overhauls. No salvage value is anticipated. If money is worth 7% to the dairy, determine the equipment's PW.

Reference no: EM131807372

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