Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Oshorne Excavation Company is planning an investment of $393,500 far a bulldozer. The bulldozer is expected to operate for 1,000 hours per year for seven
Oshorne Excavation Company is planning an investment of $393,500 far a bulldozer. The bulldozer is expected to operate for 1,000 hours per year for seven years. Customers will be charged $150 per hour for bulldozer work. The bulldozer operator costs $28 per hour in wages and benefits. The bulldozer is expected to require annual maintenance costing $10,000. The bullozer uses fuel that is expected to cost $37 per hour of bulldozer operation. Present Value of an Annuity of $1 at Compound Interest a. Determine the equal annual net cash flows from operating the bulidoten. Enter all amounts as positive numbers. a more Chech My Wors utes ismaining. b. Determine the net present value of the investment, assuming that the desired rate of return is 6 . Use the table of present value of an annuity of $1 above. If required, round to the nearest doliar and use the minus sign to indicate a negative net present value. c. Osbome Eacavation shoull 7. the investment becaute the bundozer cost is desire supporit than the gresest valve of the cash fioms at the not supesi? c. Osborne Excavation should the investment because the bulldozer cost if desired rate of retuin of 6%. 9 than the present value of the cash flows at the c Orborne Excevation should the investment because the bulliozer cost is F desired rate of return of 6%. Thaxmum than the present value of the cash flows at the minimum
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started