eBook Calculator Net Present Value-Unequal Lives Bunker Hill Mining Company has two competing proposals: a processing mil and an electric shovel. Both pieces of equipment have an initial investment of $702,850. The net cash flows estimated for the two proposals are as follows: Net Cash Flow Year Processing Mill Electric Shovel 229,000 OUTWN - $214,000 $268,000 190,000 248,000 190,000 152,000 235,000 116,000 96,000 83,000 83,000 The estimated residual value of the processing mill at the end of Year 4 is $270,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0 .943 0.909 0.893 0.870 0.833 0.890 0.826 0.797 0.756 0.694 0.340 0.751 0.712 0.658 0.579 Check My Work Year 6% 10% 1296 154 20% 0.943 909 0.893 0.870 0.833 0.890 0.826 0.797 0.756 0.694 ON 0.840 0.751 0.712 0.658 0.579 0.792 0.683 0.636 0.572 0.482 0.747 0.621 0.567 0.497 0.402 0.705 0.564 0.507 0.432 0.335 0.665 0.513 0.452 0.376 0.279 0.627 0.467 0.404 0.233 0.592 0.424 0.361 0.284 0.194 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 10%. Use the present value table appearing above. Processing Mill Electric Shovel Present value of net cash flow total Less amount to be invested Net present value Which project should be favored? Check My Work Previous