=+EX 26-9 Net present value method—annuity obj. 3

a. $24 million 1204 Chapter 26 Capital Investment Analysis E & T Excavation Company is planning an investment of $245,000 for a bulldozer. The bulldozer is expected to operate for 1,500 hours per year for five years. Customers will be charged $130 per hour for bulldozer work. The bulldozer operator costs $32 per hour in wages and benefits. The bulldozer is expected to require annual maintenance costing

$15,000. The bulldozer uses fuel that is expected to cost $42 per hour of bulldozer operation.

a. Determine the equal annual net cash flows from operating the bulldozer.