Dakota Mining Company has two competing proposals: a diamond core drill or a hydraulic excavator. Both pieces of equipment have an initial investment of $899,811. The net cash flows estimated for the two proposals are as follows:

Year	Net Cash Flow Diamond Core Drill	Net Cash Flow Hydraulic Excavator
1	$287,000	$359,000
2	255,000	333,000
3	255,000	307,000
4	204,000	316,000
5	155,000
6	129,000
7	112,000
8	112,000

The estimated residual value of the diamond core drill at the end of Year 4 is $360,000.

Year	6%	10%	12%	15%	20%
1	0.943	0.909	0.893	0.870	0.833
2	0.890	0.826	0.797	0.756	0.694
3	0.840	0.751	0.712	0.658	0.579
4	0.792	0.683	0.636	0.572	0.482
5	0.747	0.621	0.567	0.497	0.402
6	0.705	0.564	0.507	0.432	0.335
7	0.665	0.513	0.452	0.376	0.279
8	0.627	0.467	0.404	0.327	0.233
9	0.592	0.424	0.361	0.284	0.194
10	0.558	0.386	0.322	0.247	0.162

Determine which equipment should be favored, comparing the net present values of the two proposals and assuming a minimum rate of return of 12%. Use the present value table appearing above.

Line Item Description	Diamond Core Drill	Hydraulic Excavator
Present value of net cash flow total
Amount to be invested
Net present value

Which project should be favored?

Hydraulic Excavator.