Answer:
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 is $ 328,972
Explanation:
According to the given data we have the following:
Value if the wine is released now = $2.2 m = $2,200,000
Value of the wine after 1 year = $2,200,000×1.15%= $2,530,000
Additional Cost = $528,000
Interest Rate = 7%
Hence, Value of the wine now =($2,530,000- $528,000) / (1+0.07)
Value of the wine now =$1,871,028
Therefore, The difference = $2,200,000
-$1,871,028
The difference =$328,972
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 is $ 328,972
