Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please help me do D Net Present Value Method-Annuity Jones Excavation Company is planning an investment of $199,000 for a bulidozer, The buldozer is expected
Please help me do D
Net Present Value Method-Annuity Jones Excavation Company is planning an investment of $199,000 for a bulidozer, The buldozer is expected to operate for 2,000 hours per year for flve years. Customers will be charged $120 per hour for bulldozer work. The bulldozer operator costs $37 per hour in wages and benefits. The bulldozer is expected to require annuat maintenance costing $20,000, The bulldozer uses fuel that is expected to cost $48 per hour of bulldorer operation. Present Value of an Annuity of $1 at Comoound Interest a. Determine the equal annual net cash flows from operating the bullifozer. a. Determine the equal annual net cash flows from operating the bulidozer. Feedback T Check My Work a. Subtract the operating expenses (hourly fuel and labor costs, multiplied by the operating hours, plus the annual mainsenance costs) from the revenues (operating hours muttiptica by the hourly revenue). Determine the net present value of the investment, assuming that the desired rate of return is 10%. Use th present value of an annuily of $1 tabil above. Round to he nearest doliar. If required, use the minus sign to indicate a negative net present value. c. Should Jones invest in the bulldorer, based on this analysis? , becouse the bulldozer cost is the present value of the cash fows at the minimum deured rate of retum of 10s. d. Determine the number of operating hours such that the present value of cash flows equals the amount to be invested Round interim calculatiens and final animer to the nearest whole number. hours 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