Net Present Value-Unequal Lives Bunker Hill Mining Company has two competing proposals: a processing mill and an electric shovel. Both pieces of equipment have an initial Investment of 5877.451. The net cash flows estimated for the two proposals are as follows: Year 6 Net Cash Flow Processing Mill Electric Shovel 1 $280,000 $350,000 2 249,000 325,000 3 249,000 300,000 4 199,000 308,000 1 5 151,000 126,000 7 109,000 3 109,000 The estimated residual value of the processing mill at the end of Year 45 $350,000 Present Value of $1 at Compound Interest Year 6% 109 12% 15% 209 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 0.640 0.751 0.712 0.658 0.579 44 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 0705 The estimated residual value of the processing mill at the end of Year 4 is $350,000 Present Value of $1 at Compound Interest Year 6% 109 129 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 0.322 0.233 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 Processing Mill Electric Shovel Present value of net cash flow total Less amount to be invested Net present value Which project should be favored