Bunker Hill Mining Company has two competing proposals: a processing mill and an electric shovel. Both pieces of equipment have an initial investment of $750,000. The net cash flows estimated for the two proposals are as follows: Net Cash Flow Year Processing Mill Electric Shovel 1 $319,000 $345,000 2 266,000 318,000 3 266,000 314,000 4 256,000 314,000 5 187,000 6 149,000 7 137,000 8 137,000 The estimated residual value of the processing mill at the end of Year 4 is $290,000.

Determine which equipment should be favored, comparing the net present values of the two proposals and assuming a minimum rate of return of 15%. If required, round to the nearest dollar.

Processing Mill Electric Shovel Net present value $ $ Which project should be favored?