Capital Investment Analysis; Jones Excavation Company is planning an investment of $190,800 for a bulldozer. The bulldozer is expected to operate for 1,000 hours per year for five years. Customers will be charged $140 per hour for bulldozer work. The bulldozer operator costs $33 per hour in wages and benefits. The bulldozer is expected to require annual maintenance costing $10,000. The bulldozer uses fuel that is expected to cost $43 per hour of bulldozer operation.
Capital Investment Analysis; Jones Excavation Company is planning an investment of $190,800 for a bulldozer. The bulldozer is expected to operate for 1,000 hours per year for five years. Customers will be charged $140 per hour for bulldozer work. The bulldozer operator costs $33 per hour in wages and benefits. The bulldozer is expected to require annual maintenance costing $10,000. The bulldozer uses fuel that is expected to cost $43 per hour of bulldozer operation.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter12: Capital Investment Analysis
Section: Chapter Questions
Problem 2BE
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Capital Investment Analysis; Jones Excavation Company is planning an investment of $190,800 for a bulldozer. The bulldozer is expected to operate for 1,000 hours per year for five years. Customers will be charged $140 per hour for bulldozer work. The bulldozer operator costs $33 per hour in wages and benefits. The bulldozer is expected to require annual maintenance costing $10,000. The bulldozer uses fuel that is expected to cost $43 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 |
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