Net Present Value Method--Annuity Briggs Excavation Company is planning an investment of $164,100 for a bulldozer. The bulldozer is expected to operate for 2,000 hours per year for five years. Customers will be charged $110 per hour for bulldozer work. The bulldozer operator costs $31 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 $41 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 1.833 1.736 1.690 1.626 1.528 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 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 flows from operating the bulldozer. Use a minus sign to indicate cash outflows. Briggs Excavation Equal Annual Net Cash Flow Cash inflows: Hours of operation 2,000 Revenue per hour Revenue per year 110 220,000 Cash outflows: Hours of operation 2,000 Fuel cost per hour 41 Labor cost per hour 31 Total fuel and labor costs per hour 72 Fuel and labor costs per year 144,000 Maintenance costs per year -20,000 Annual net cash flow 56,000 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 167,496 Amount to be invested 164,100 Net present value 3,396 c. Should Briggs Excavation invest in the bulldozer, based on this analysis? the present value of the cash flows at the minimum desired rate of return of 20 %. Yes , because the bulldozer cost is less than 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. hours