Net Present Value-Unequal Lives Gold Creek Mining Company has two competing proposals: a processing mill and an electric shove Both pieces of equipment have an initial investment of $901,973. The net cash flows estimated fo the two proposals are as follows: Net Cash Flow Year Processing Mill Electric Shovel $288,000 256,000 256,000o 204,000o 156,000 130,000 112,000 112,000 $360,00o 334,000o 308,000 317,000 2 3 5 6 7 8 The estimated residual value of the processing mill at the end of Year 4 is $360,000. Present Value of $1 at Compound Interest 20% 0.833 0.694 Year 10% 15% 0.870 0.756 6yo 12o 0.943 .9090.893 0.826 0.797 2 0.890 Check My Work Previous Next