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,realized at the end of the year.If the interest rate is 7%,what is the difference in the benefit the vintner will realize 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 $200,000 more if he releases the wine now.
C)He will earn $107,000 less if he releases the wine now.
D)He will earn $80,000 more if he releases the wine now.
E)He will earn $500,000 less if he releases the wine now.

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The Answer of 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,realized at the end of the year.If the interest rate is 7%,what is the difference in the benefit the vintner will realize 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 $200,000 more if he releases the wine now.
C)He will earn $107,000 less if he releases the wine now.
D)He will earn $80,000 more if he releases the wine now.
E)He will earn $500,000 less if he releases the wine now.

A Vintner Is Deciding When to Release a Vintage of Sauvignon