Briggs Excavation Company is planning an investment of $677,800 for a bulldozer. The bulldozer is expected to operate for 3,000 hours per year for 10 years. Customers will be charged $125 per hour for bulldozer work. The bulldozer operator costs $26 per hour in wages and benefits. The bulldozer is expected to require annual maintenance costing $30,000. The bulldozer uses fuel that is expected to cost $34 per hour of bulldozer operation.

Present Value of an Annuity of $1 at Compound 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	3.353	2.991
6	4.917	4.355	4.111	3.785	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 flows from operating the bulldozer. Use a minus sign to indicate cash outflows.

Briggs Excavation Company
Equal Annual Net Cash Flows
Cash inflows:
Hours of operation		______________
Revenue per hour		X $_________
Revenue per year			$___________
Cash outflows:
Hours of operation		_____________
Fuel cost per hour	$__________
Labor cost per hour	______________
Total fuel and labor costs per hour		X $_______
Fuel and labor costs per year			___________
Maintenance costs per year			___________
Annual net cash flows			$_________

b. Determine the net present value of the investment, assuming that the desired rate of return is 20%. Use the present value of an annuity of $1 table above. Round to the nearest dollar. If required, use the minus sign to indicate a negative net present value.

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

c. Determine the number of operating hours such that the present value of cash flows equals the amount to be invested. Round interim calculations and final answer to the nearest whole number. _______ hours