Jones Excavation Company is planning an investment of $565,900 for a bulldozer. The bulldozer is expected to operate for 2,000 hours per year for 8 years. Customers will be charged $145 per hour for bulldozer work. The bulldozer operator costs $36 per hour in wages and benefits. The bulldozer is expected to require annual maintenance costing $20,000. The bulldozer uses fuel that is expected to cost $47 pe 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. Jones Excavation Company Equal Annual Net Cash Flows Line Item Description Amount Amount Amount Cash inflows: Hours of operation 2,000 Revenue per hour x $ 145 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 flows 47 36 2,000 x $ 83 290,000 166,000 20,000 104,000 b. Determine the net present value of the investment, assuming that the desired rate of return is 10%. Use the present value of an annuit 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 554,840 565,900 -11,060 c. Should Jones invest in the bulldozer, based on this analysis? No , because the bulldozer cost is more than the present value of the cash flows at the minimum desired rate of return of 10%. d. 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. 2,034 X hours