Year Processing Mill Net Cash Flow Electric Shovel 1 $237,000 $296,000 2 211,000 275,000 3 211,000 254,000 st 4 168,000 261,000 5 128,000 6 107,000 7 92,000 92,000 8 The estimated residual value of the processing mill at the end of Year 4 is $300,000. Present Value of $1 at Compound Interest 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 8 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 10%. Use the present value table appearing above. Present value of net cash flow total Less amount to be invested Net present value Which project should be favored? Processing Mill Electric Shovel $ $