Ashley, has discovered another wine, wine D.Wine drinkers are willing to pay 40 dollars to drink it right now.The amount that wine drinkers are willing to pay will rise by 20 dollars each year that the wine ages.The interest rate is 10%.How much would Ashley be willing to pay for the wine if he buys it as an investment? (Pick the closest answer.)

A) 200 dollars
B) 40 dollars
C) 93 dollars
D) 440 dollars
E) 71 dollars

To find the present value of the wine as an investment, we need to use the formula:
PV = FV/(1+r)^n
Where PV is the present value, FV is the future value (amount wine drinkers are willing to pay in the future), r is the interest rate, and n is the number of years until the wine is sold.
In this case, FV = 40 + 20n (where n = number of years), r = 10%, and we want to find the PV when n = 0 (i.e. the wine is just purchased).
PV = (40 + 20(0))/(1+0.10)^0 = 40/1 = 40
So, the wine is worth 40 dollars if Ashley buys it as an investment. He wouldn't be willing to pay more than that because he would earn a negative return if he paid more than 40 dollars. Therefore, choices A, D, and E are all too high. However, the amount that the wine drinkers are willing to pay will increase over time, so Ashley would expect to earn a positive return if he sells the wine after a few years. To find out how much he can expect to earn, he needs to use the same formula as above but with a value of n that is greater than 0. The closest answer to the amount that he would earn after a few years is choice C (93 dollars).