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Jones Excavation Company is planning an investment of $177,900for a bulldozer. The bulldozer is expected to operate for 2,000hours per year for five years. Customers will be charged $120 perhour for bulldozer work. The bulldozer operator costs $38 per hourin wages and benefits. The bulldozer is expected to require annualmaintenance costing $20,000. The bulldozer uses fuel that isexpected to cost $50 per hour of bulldozer operation.

Present Value of an Annuity of $1 atCompound 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 flowsfrom operating the bulldozer.

Jones Excavation Company
Equal Annual Net Cash Flows
Cash inflows:
		× $
			$
Cash outflows:
	$
		× $
			$

b. Determine the net present value of theinvestment, assuming that the desired rate of return is 6%. Use thepresent value of an annuityof $1 table above. Round to the nearestdollar. If required, use the minus sign to indicate a negative netpresent value.

Present value of annual net cash flows	$
Amount to be invested
Net present value	$

c. Should Jones invest in the bulldozer, basedon this analysis?
, because the bulldozer cost is   the present valueof the cash flows at the minimum desired rate of return of 6%.

d. Determine the number of operating hours suchthat the present value of cash flows equals the amount to beinvested. Round interim calculations and final answer to thenearest whole number.
hours