Interest income and investment

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Reference no: EM1364834

GRP Corporation has $500,000 in a bank account paying 0.35% annual interest. As an alternative to leaving the money in the account, the company is considering investing the entire amount for five years. possible investments have been identified as shown below.

Investment E is a new machine tool center which would be used in an expanded assembly line in the company's manufacturing plant. The tool center will cost $500,000 and is expected to return cash flows of $125,000 per year for five years. The company uses a cost of capital of 10% for this type of investment.

Assuming that you will invest in only one of these (if any), which would you choose and why?

**needs to be done in excel

Reference no: EM1364834

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