Determine whether the investment plan is viable or not

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A corporation plans to invest in a small project which costs a cone-time expenditure of $600,000 at year 0 and offers an annual return of $160,000 each in the next five years. It intends to finance this project by borrowing from a local bank which requires the origination fee of $50,000. Compounded interest payments are made annually at a nominal interest rate of 10%/year with the repayment of the principal at the end of year 5. The bank compounds the financial charges monthly. If the MARR of the Corporation is 15%, draw cash flow diagrams and determine whether the investment plan is viable or not.

Reference no: EM131089433

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