Net Present Value Method-Annuity Briggs Excavation Company is planning an investment of $301,900 for a bulldozer. The bulldozer is expected to operate for 2,000 hours per year for six years. Customers will be charged $120 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 $20,000. The bulldozer uses fuel that is expected to cost $42 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 2,000 Revenue per hour X $ 120 Revenue per year 240,000 Cash outflows: Hours of operation 2,000 Fuel cost per hour 42 Labor cost per hour 32 Total fuel and labor costs per hour X $ 74 Fuel and labor costs per year 148,000 X Maintenance costs per year 20,000 X Annual net cash flows 168,000 X b. Determine the net present value of the investment, assuming that the desired rate of return is 12%. 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 70,000 x Amount to be invested $ 204,700 X Net present value $ 100,150 X c. Should Briggs Excavation 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 12%. 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