Present Your Findings to the CEO

The Background

You are on the product team for the AAA battery company. AAA has been around for $10$ years and had net annual revenue of $$100$M last year. Senior leadership is considering investment opportunities with the available cash in the next $5$ years. You just completed your analysis of the battery project $($this is the same project you just worked on during the week$)$ based on the marketing & sales team$$s data, including calculating the NPV$.$ The finance team is convinced that the $8\%$ interest rate is the right level based on risk, etc. $($reminder$,$ NPV is $$16$M for this option$).$

Another team has a different proposal. This one involves selling battery parts to other vendors; it will cost about the same and has an NPV of $$20$M over the same period $($using a $5\%$ interest rate$).$ This second project is considered $$safer$$ it doesn$$t have a high return$/$low return option, hence the lower interest rate.

Senior leadership is asking for a recommendation $$ invest in the battery project, invest in the supply project, or put the money in government bonds $(4\%$ rate$)$ for a few years $($at least$)$ and wait for a new project idea. They only have enough money to invest in one of the two projects.

Your Challenge

Come up with a recommendation and $2$ key arguments for your case. Use the data provided here but do not limit yourself $($i$.$e$.$ use common sense$).$