Year 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 5717,663 The net cash nows estimated for the two proposals are as follows: Net Cash Flow Processing MIHI Electric Shovel 1 $228,000 $285,000 2 203,000 264,000 3 203,000 244,000 162,000 251,000 5 123,000 103,000 7 89,000 8 89,000 4 6 The estimated residual value of the processing mill at the end of Year 4 is $290,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.909 0.893 0.870 0.833 2 0.943 0.890 0.840 0.826 0.797 0.756 0.694 0.751 0.712 0.658 0.579 Previous Next Year 6% 10% 12% 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 0.627 0.467 0.404 0.327 0.233 9 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 MINI Electric Shovel Present value of net cash flow total Less amount to be invested Net present value Which project should be favored