A Brewery Is Considering Adding a New Line of Craft

question 20

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

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Definitions:

Communication Channel

The medium through which information is transmitted from one person or entity to another, such as email, telephone, or face-to-face conversations.

Feedback

Information provided about reactions to a product, a person's performance of a task, etc., used as a basis for improvement.

Encoding

The process of converting information into a form that can be transmitted and understood by the receiver during communication.

Decoding

The process of interpreting and understanding communication signals or data.