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

Question

Quizplus · Accepted Answer

The Answer of 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

A Brewery Is Considering Adding a New Line of Craft