Bunker Hill Mining Company has two competing proposals: a processing mill and an electric shovel. Both pieces of equipment have an initial investment of $423,389. The net cash flows estimated for the two proposals are as follows: Net Cash Flow Electric Shovel Year Processing Mill $145,000 $181,000 129,000 2 168,000 3 129,000 155,000 103,000 4 160,000 5 78,000 6 65,000 7 57,000 57,000 8 The estimated residual value of the processing mill at the end of Year 4 is $180,000. LO The estimated residual value of the processing mill at the end of Year 4 is $180,000. Present Value of $1 at Compound Interest 10% Year 6% 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 0.840 0.751 0.712 0.658 0.579 0.792 4 0.683 0.636 0.572 0.482 0.567 0.747 0.621 0.497 0.402 0.705 0.432 6 0.564 0.507 0.335 0.665 0.513 0.376 7 0.452 0.279 0.627 8 0.467 0.404 0.327 0.233 0.592 0.424 0.361 0.284 0.194 0.162 0.558 0.386 0.247 10 0.322 Determine which equipment should be favored, comparing the net present values of the two proposals and assuming a minimum rate of return of 15%. Use the present value table appearing above. Electric Shovel Processing Mill Present value of net cash flow total Less amotunt to be invested $ Net present value