Boilermaker Brew Plc

question 21

Short Answer

Boilermaker Brew Plc. and Hoosier Brewing Co. plan to combine their U.S. operations in an attempt to bolster their sagging sales in a tough domestic market. The two companies will form a new unit called HoosierMaker. The companies expect to invest $120 million upfront to set up the new unit. HoosierMaker expects to garner revenue of $9.5 million each year and spend $1.3 million a year in costs, over the next 7 years. What is the future worth of this investment if the companies' rate of return is 16% per year?

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Definitions:

High-Tech Business Products

Products that incorporate the latest technology or are based on high-level scientific research, aimed at the business market.

New

Not existing before; made, introduced, or discovered recently or now for the first time.

Unique

Being the only one of its kind; unlike anything else, often used to describe distinctive features or qualities.

Premium Approach

A strategy in marketing or sales where products or services are presented as high-quality or luxury options, often at a higher price point.