Bunker Hill Mining Company has two competing proposals: a processing mill and an electric shovel. Both pieces of equipment have an initial investment of $740,000. The net cash flows estimated for the two proposals are as follows: Net Cash Flow Year Processing Mill Electric Shovel 1 $304,000 $338,000 2 245,000 322,000 3 245,000 315,000 4 278,000 316,000 5 185,000 6 145,000 7 123,000 8 123,000 The estimated residual value of the processing mill at the end of Year 4 is $270,000.