Multiple Choice
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 20% more, though there will be additional costs of $500 000. If the interest rate is 7%, what is the difference in the benefit the vintner will realise if he releases the wine after barrel-aging it for one year or if he releases the wine now?
A) He will earn $600 000 less if he releases the wine now.
B) He will earn $107 000 less if he releases the wine now.
C) He will earn $80 000 less if he releases the wine now.
D) He will earn $60 000 more if he releases the wine now.
Correct Answer:
Verified
Correct Answer:
Verified
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