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adell [148]
3 years ago
12

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

.4 million. If it is barrel aged for a further year, it will be worth 10% more, though there will be additional costs of $360,000 incurred 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?
Business
1 answer:
ziro4ka [17]3 years ago
3 0

Answer:

$269,158.88

Explanation:

The computation is shown below:

Before the difference of the amount, first we have to determine the value of the wine after one year which is shown below:

= $2,400,000 + $2,400,000 × 10%

= $2,400,000 + $240,000

= $2,640,000

And, the interest rate is 7%

Plus the additional cost is $360,000

So, the value of the wine now is

= ($2,640,000 - $360,000) ÷ (1 + 0.07)

= $2,130,841.12

So, the difference is

= $2,400,000 - $2,130,841.12

= $269,158.88

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Age Group            Amount           Estimated Percent     Estimated  Amount

                              Receivable      Uncollectible                 Uncollectible

Not yet due             $ 32,000              4 %                          $1,280

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Allowance for uncollectible accounts                    $3,936

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April 3, 2022,  Allowance for uncollectible

                             accounts                             $500

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Allowance for uncollectible  accounts                             $100

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