Barney's Liquids and Aunt Bee's Lemonade Plan to Expand Their

Short Answer

Barney's Liquids and Aunt Bee's Lemonade plan to expand their international partnership for the marketing and distribution of ready- to- drink tea products by adding 11 countries to their current markets. If the agreement is reached, operations are expected to begin 2 years from now. The snack and beverage company forecasts that the agreement will bring additional revenue of $80 million in the first year of the operation i.e., the end of year 3), with amounts increasing by $2.5 million each year for the next 7 years. What is the present value now t =0) of the total revenue if the interest rate of 17% per year?