The estimated residual value of the diamond core drill at the end of Year 4 is $190,000

Net present valueunequal lives Dakota Mining Company has two Competing pnsposals: a diamond core drill or a hydraulic excavator. Both pieces Of equipment have an initial investment Of $476,081. The net cash estimated the two proposals are as follows: Net Cash Flow Diamond Core Drill $152,000 135,000 135,000 108,000 82,000 68,000 59,000 59,000 Net Cash Flow Hydraulic Excavator $190,000 176,000 163,000 167,000 The estimated residual value the diamond core drill at the end Year 4 iS $190,000. Present Value Of $1 at Compound Interest 12% 0.943 0.890 0.840 0.792 0.747 0.705 0.665 0.627 0.592 0.55B 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 o. 870 0.756 O. 6sg 0.572 0.497 0.432 0.376 0.327 0.284 0.247 0.833 0.694 0.579 0.482 0.402 0.335 0.279 0.233 0.194 0.162 Determine which equipment Should be favored, comparing the net present values the two proposals and assuming a minimum rate Of return Of 12%. the present value table appearing above. Present value Of net cash flow tota I Amount to be invested Net present value Which project Should be favored? Diamond Core Drill Hydraulic Excavator 532,210 v' 660,453 x 56,129 184,372