Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Beverage Wholesale LLC is a company selling luxury liquors and spirits to restaurants. Beverage Wholesale needs to rethink the pricing of its whiskey products. It
Beverage Wholesale LLC is a company selling luxury liquors and spirits to restaurants. Beverage Wholesale needs to rethink the pricing of its whiskey products. It imports bottles of whiskey from Scotland at $50 per bottle and pays its supplier in cash at the day it receives its whiskey shipments. Beverage Wholesale on average holds its inventory for 83 days before it can sell it. All its sales are made on credit, and it takes Beverage Wholesale LLC 63 days to collect on its receivables. Beverage Wholesale investors require a 18.25% annual return; hence, it discounts cashflows at that rate and it discounts cash flows daily. You may assume that the year has 365 days. What is the minimum price that Beverage Wholesale needs to charge for its whiskey to earn a positive NPV
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started