Q 3.

What should the Passalacquas do: buy the East Side Meats building and develop it into a
winery; buy another old vineyard; or do something else?

Looking at both the options

a) Buying the East Side Meats building and develop it into an independent winery.

Pros Cons
Would need less capital investment than Going completely independent would make
buying a vineyard face risks as the safety of Turley high
position job would be absent
Demand -As the demand is already high, an Passalacquas would need to send more time
additional independent winery would help and effort when his already occupied with
in selling extra produce his job and Vineyard
Experiment with more variety of grapes and Another vineyard would mean less capital
wines for the next 5 years
Would not have to limit the output

b) Buying another old vineyard.

Pros Cons
Has Turley’s facility that he can use Expensive to buy another vineyard at
current prices
Can be sold at higher price in future. Quality will be compromised if he opts for
loan as the focus will be on profits
More control on cost of grapes for Sand Less increase in outputs due to the
lands restrictions put by Turley
One has to investment more on larger share
to land to come close to a breakeven point
in the immediate future.

Based on these points Buying the East Side Meats building and develop it into an
independent winery is a better option.