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Briggs Excavation Company is planning an investment of $307,300for a bulldozer. The bulldozer is expected to operate for 2,000hours per year for five years. Customers will be charged $120 perhour for bulldozer work. The bulldozer operator costs $31 per hourin wages and benefits. The bulldozer is expected to require annualmaintenance costing $20,000. The bulldozer uses fuel that isexpected to cost $41 per hour of bulldozer operation.

Present Value of an Annuity of $1 atCompound Interest
Year	6%	10%	12%	15%	20%
1	0.943	0.909	0.893	0.870	0.833
2	1.833	1.736	1.690	1.626	1.528
3	2.673	2.487	2.402	2.283	2.106
4	3.465	3.170	3.037	2.855	2.589
5	4.212	3.791	3.605	3.352	2.991
6	4.917	4.355	4.111	3.784	3.326
7	5.582	4.868	4.564	4.160	3.605
8	6.210	5.335	4.968	4.487	3.837
9	6.802	5.759	5.328	4.772	4.031
10	7.360	6.145	5.650	5.019	4.192

a. Determine the equal annual net cash flowsfrom operating the bulldozer. Use a minus sign to indicate cashoutflows.

Briggs Excavation
Equal Annual Net Cash Flow
Cash inflows:
Hours of operation
Revenue per hour		$
Revenue per year			$
Cash outflows:
Hours of operation
Fuel cost per hour	$
Labor cost per hour
Total fuel and labor costs per hour		$
Fuel and labor costs per year
Maintenance costs per year
Annual net cash flow			$

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a. Subtract the operating expenses (hourly fuel and labor costs,multiplied by the operating hours, plus the annual maintenancecosts) from the revenues (operating hours multiplied by the hourlyrevenue).

b. Determine the net present value of theinvestment, assuming that the desired rate of return is 6%. Use thepresent value of an annuity of $1 table above. Round to the nearestdollar. If required, use the minus sign to indicate a negative netpresent value.

Present value of annual net cash flows	$
Amount to be invested	$
Net present value	$

c. Should Briggs Excavation invest in thebulldozer, based on this analysis?
Yes , because the bulldozer cost is less than  thepresent value of the cash flows at the minimum desired rate ofreturn of 6%.

d. Determine the number of operating hours suchthat the present value of cash flows equals the amount to beinvested. Round interim calculations and final answer to thenearest whole number.
hours