Whiskey makers have an unusual business model: They make a product today, and then let it sit in barrels in a warehouse for 20 years before they sell it. Suppose that it takes $12 of resources to produce a bottle of whiskey today. How much will the whiskey maker have to charge for a bottle of whiskey in 20 years in order to make spending that $12 a wise investment? (Assume the whiskey maker faces market interest rates of 6%.)
Whiskey makers have an unusual business model: They make a product today, and then let it sit in barrels in a warehouse for 20 years before they sell”
by | Mar 12, 2022 | Uncategorized
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