# Question

Briggs Excavation Company is planning an investment of $ 132,000 for a bulldozer. The bulldozer is expected to operate for 1,500 hours per year for five years. Customers will be charged $ 110 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 $ 8,000. The bulldozer uses fuel that is expected to cost $ 46 per hour of bulldozer operation.

a. Determine the equal annual net cash flows from operating the bulldozer.

b. Determine the net present value of the investment, assuming that the desired rate of return is 10%. Use the present value of an annuity of $ 1 table in the chapter (Exhibit 2). Round to the nearest dollar.

c. Should Briggs invest in the bulldozer, based on this analysis?

d. Determine the number of operating hours such that the present value of cash flows equals the amount to be invested.

a. Determine the equal annual net cash flows from operating the bulldozer.

b. Determine the net present value of the investment, assuming that the desired rate of return is 10%. Use the present value of an annuity of $ 1 table in the chapter (Exhibit 2). Round to the nearest dollar.

c. Should Briggs invest in the bulldozer, based on this analysis?

d. Determine the number of operating hours such that the present value of cash flows equals the amount to be invested.

## Answer to relevant Questions

Double K Doughnuts has computed the net present value for capital expenditure at two locations. Relevant data related to the computation are as follows:a. Determine the present value index for each proposal.b. Which ...Munch N’ Crunch Snack Company is considering two possible investments: a delivery truck or a bagging machine. The delivery truck would cost $ 43,056 and could be used to deliver an additional 95,000 bags of pretzels per ...Northern Highlands Railroad Company is evaluating three capital investment proposals by using the net present value method. Relevant data related to the proposals are summarized as follows:Instructions 1. Assuming that the ...The investment committee of Auntie M’s Restaurants Inc. is evaluating two restaurant sites. The sites have different useful lives, but each requires an investment of $ 900,000. The estimated net cash flows from each site ...The total factory overhead for Bardot Marine Company is budgeted for the year at $ 600,000 divided into two departments: Fabrication, $ 420,000, and Assembly, $ 180,000. Bardot Marine manufactures two types of boats: ...Post your question

0