E17.25 Life cycle costing: orchard Renmark Orchards and Cannery is considering buying high pressure cleaning equipment that vacuums waste liquids into a storage tank and then purifies the waste. The waste water can then be pumped back onto orchards. The system will avoid any leakage of liquid waste into the Murray River, which has happened once every two years, and will avoid the related workers' compensation claims that have arisen every five years. The operating characteristics are as follows: Initial outlay for new equipment, 10 year life, no residual value $489 345 Annual operating cost over 10 year life $15 904 p.a. Depreciation 10% p.a. Savings in water cost due to reclaimed water $15 987 p.a. Total cost of cleaning and maintaining the system every 4 years $14 900 Workers' compensation claim $5 500