Three years from now, Yuengling & Sons Inc plans to buy a $21 million brewery so that it can expand into Hawaii. US Treasuries are paying 4% interest and the stock market earned 12% last year. The family-owned company is unwilling to access external capital. How much earnings does Yuengling & Sons Inc need each year in order to execute the plan with certainty?
A. $6.727 million
B. $7.054 million
C. $6.534 million
D. $6.223 million
The question belongs to Finance and it is about calculation of earnings needed for a company planning to buy $21 million brewery.
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