Suppose Anheuser-Busch InBev is considering introducing a new ultra-light beer with zero calories to be called...

Suppose Anheuser-Busch InBev is considering introducing a new ultra-light beer with zero calories to be called BudZero. The firm believes that the beer’s flavor and appeal to calorie-conscious drinkers will make it a success. The cost of bringing the beer to market is $200 million, but Anheuser-Busch InBev expects first year incremental free cash flows from BudZero to be $100 million and to grow at 3% per year thereafter. If Anheuser-Busch InBev’s WACC is 5.7%, should it go ahead with the project?

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jeff jeffy answered 1 year ago

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