ABC Inc is considering the purchase of new pulverizing equipment. The top management of the company has requested that you provide the net present value for the equipment being considered. The relevant data for the new equipment are presented below:

First Cost $125,000

Annual Income 10,000

Annual Operating Cost 8,000 (The first year and increasing by $750 per year )

Property Taxes 5% of first cost

Salvage Value 8% of first cost

ABC Inc has a minimum attractive rate of return (MARR) of 4% and the equipment has an expected useful life of 6 years