Scenario 15.7: Consider the Following Information

question 4

Multiple Choice

Scenario 15.7:
Consider the following information:
You move to northern California and buy a winery that already holds a stock of some wine in barrels. You are deciding whether to sell the wine now, or keep it until next year. The current price of wine is $20 per bottle, and it costs $2 per bottle to get the wine from barrels to bottles.
-Based on the information in Scenario 15.7. You should:

• A) keep the wine in barrels.
• B) sell the wine now, to get $18 per bottle in profit.
• C) keep the wine unless you expect the price to fall below $18 per bottle.
• D) keep the wine unless you expect the price to rise above $22 per bottle.
• E) not do anything until you find out what the interest rate is.