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 FlowYear     Processing Mill     Electric Shovel1\$317,000 \$344,000 2267,000 315,000 3267,000 312,000 4255,000 321,000 5188,000   6149,000   7132,000   8132,000   The estimated residual value of the processing mill at the end of Year 4 is \$290,000.This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.  Open spreadsheet Determine which equipment should be favored, comparing the net present values of the two proposals and assuming a minimum rate of return of 10%. If required, round to the nearest dollar. Processing MillElectric ShovelNet present value\$\$Which project should be favored?

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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 \$317,000 \$344,000 2 267,000 315,000 3 267,000 312,000 4 255,000 321,000 5 188,000 6 149,000 7 132,000 8 132,000

The estimated residual value of the processing mill at the end of Year 4 is \$290,000.

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Determine which equipment should be favored, comparing the net present values of the two proposals and assuming a minimum rate of return of 10%. If required, round to the nearest dollar.

 Processing Mill Electric Shovel Net present value \$ \$

Which project should be favored?

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Step 1

Calculation of Net Present Value:

Step 2

Net Present Value:

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