Create an example of investment analysis using $100,000 to invest. Compare returns invested all in Red Robin Gourmet Burgers common stock for five years, or a bank account with a 5% fixed return for five years.

These are the only two investment options to compare:

A. Invest 100,000 in a bank account earning 5% per year for an expected 5 years

B. Invest 100,000 common stock of Red Robin Gourmet Burgers.

The audience for your analysis is an investor approximately 25 years from retirement and the investors income is greater than living expenses. The investor has a liquid net worth of $1,000,000 of which 40% is invested in the S&P 500 index, 40% in a medium-duration, high-quality bond fund, and 20% in a savings account earning 5% interest per year. Determine if the investor (under the above criteria) should invest $100,000 in a savings account or invest $100,000 of Red Robin common stock.

Which investment option should the investor choose? Is the investor risk-neutral, risk-averse, or risk friendly?

Your analysis and findings should be succinct but also provide sufficient information for the investor to make an informed decision by addressing the investors reasonable questions including the following:

What is the problem? What are you trying to figure out?

What historical financial information helped you make your decision ratios, growth rates, margins, projections, competition?

What role does risk play and how do you account for it in your analysis?

What industry information helped you make your decision such as competition, overall markets, and state of the economy?

What are you assuming about the future?

What are the critical factors that led you to choose the option you chose?