A Brewery Is Considering Adding a New Line of Craft

Multiple Choice

A brewery is considering adding a new line of craft beers to its product mix.The new beer will require additional brewing and bottling capacity at a cost of $15 million,but is expected to generate new sales of $5 million per year for the next 5 years.If the brewery has a cost of capital of 6%,what is the NPV of this investment?

A) $6.1 million
B) $10 million
C) -$15 million
D) $8.6 million
E) $3.7 million