A vintner is deciding when to release a vintage of Sauvignon Blanc. If it is bottled and released now, the wine will be worth $2.2 million. If it is barrel aged for a further year, it will be worth 15% more, though there will be additional costs of $528,000 incurred at the end of the year. If the interest rate is 7%, what is the difference in the benefit the vintner will realize if he releases the wine after barrel aging it for one year or if he releases the wine now?

Question

12-05-2020
Business

contestada

A vintner is deciding when to release a vintage of Sauvignon Blanc. If it is bottled and released now, the wine will be worth $2.2 million. If it is barrel aged for a further year, it will be worth 15% more, though there will be additional costs of $528,000 incurred at the end of the year. If the interest rate is 7%, what is the difference in the benefit the vintner will realize if he releases the wine after barrel aging it for one year or if he releases the wine now?

Respuesta :

Otras preguntas

Cookie monster, one of the characters on the children's tv show sesame street, has an intense urge to consume cookies, even when doing so is irrational and mala

Which of the following prevents modern readers from being as easily convinced by science fiction stories as readers from an earlier era?

If people who are aroused by watching rock videos are then insulted, their feelings of anger will be greater than those of people who have been similarly provok

Jenny says, "beth, i'm really upset about how we divide the cooking chores." beth retorts, "speaking of cooking, my secretary brought in great cookies today." b

Who wanted to make one of England's Southern Colonies into a haven for English debtors? Use the excerpt and your knowledge of social studies to answer the follo

Two of the four principle classes of organic compounds are proteins and nucleic acids. What is the relationship between proteins and nucleic acids

a builder could get 6 sheets of sheetrock for $9 if he bought 12 sheets how much money would he have spent

how do I do this???????????????

Mark earns $135 for selling a $1,500 refrigerator. Which sale listed has the same commission rate? A) $36 commission on a $400 dryer sale B) $40 commission on

nicof2010 nicof2010 · Answer 1 · 2020-05-13T03:19:51+02:00

Answer:

The difference in the benefit the vintner will realize if he releases the wine after barrel aging it for one year or if he releases the wine now is $ 328,972

Explanation:

According to the given data we have the following:

Value if the wine is released now = $2.2 m = $2,200,000

Value of the wine after 1 year = $2,200,000×1.15%= $2,530,000

Additional Cost = $528,000

Interest Rate = 7%

Hence, Value of the wine now =($2,530,000- $528,000) / (1+0.07)

Value of the wine now =$1,871,028

Therefore, The difference = $2,200,000 -$1,871,028

The difference =$328,972

The difference in the benefit the vintner will realize if he releases the wine after barrel aging it for one year or if he releases the wine now is $ 328,972