Net Present Value$-$Unequal Lives

The estimated residual value of the diamond core drill at the end of Year $4$ is $$270,000.$

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet

Determine which equipment should be favored, comparing the net present values of the two proposals and assuming a minimum rate of return of $10\%.$ If required, round to the nearest dollar.

Diamond Core Drill

Hydraulic Excavator

Net present value

q

Which project should be favored?