The Laiterie de Coaticook in the Eastern Townships of Quebec produces several types of cheddar cheese. It markets thischeese in four varieties: aged 2 months, 9 months, 15 months, and 2 years. At the producer's store, 2 kg of each variety sellfor the following prices: $8.50, $10.00, $11.50, and $12.50, respectively. Consider the cheese maker's decision whether tocontinue to age a particular 2-pound block of cheese. At 2 months, he can either sell the cheese immediately or let it agefurther. If he sells it now, he will receive $8.50 immediately. If he ages the cheese, he must give up the $8.50 today to receivea higher amount in the future.What is the IRR (expressed in percent per month) of the investment of giving up $85.00 today by choosing to store 20 kg ofcheese that is currently 2 months old and instead selling 10 kg of this cheese when it has aged 9 months, 6 kg when it hasaged 15 months, and the remaining 4 kg when it has aged 2 years?The IRR is % per month. (Enter your response as a percent rounded to two decimal places.)

Internal rate of return is a capital budgeting technique that uses a discounted rate to assess the…

Answered: The Laiterie de Coaticook in the…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 9EB: Berettis Food Mart has 6,000 pounds of raw pork nearing its expiration date. Each pound has a cost...

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