Graphics and Concluding question

Oliver Wyman case: Setting up a Wine Cellar
New question on Nov 23, 2022
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Alex asked on Nov 23, 2022

In the Graphics “Economics over time” it should consider the big revenue every five years.

 

Quote:

"Ask the candidate: Does the 20% p.a. strike one as a credible return on an investment-grade wine? Why or why not? How does it compare to other returns you know?

 

Well, yes, it’s extremely aggressive but not completely implausible. It’s certainly not a sustainable return!"

 

I think that the answer is quite weak. Could someone elaborate a bit more? I thought that 20% was an actually quite high appreciation and that it would probably be closer to 5%. At least it wouldn't make sense to me that all years appreciate equally. Particularly the first ones. Could someone share their views on that please?

 

 

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