These data were derived from a forest inventory and are to be used to calculate the best (most revenue return) rotation.  The manager wishes to maximize net income and ha

Managerial Economics: Applications, Strategies and Tactics (MindTap Course List)
14th Edition
ISBN:9781305506381
Author:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Publisher:James R. McGuigan, R. Charles Moyer, Frederick H.deB. Harris
Chapter17: Long-term Investment Analysis
Section: Chapter Questions
Problem 10E
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These data were derived from a forest inventory and are to be used to calculate the best (most revenue return) rotation.  The manager wishes to maximize net income and has the following information:

 

Establishment Costs:

$175/acre 

 

Thinning and burning at age 17 cost:

$75 

 

Stumpage sells for:

$41/unitvol

 

MAR:

6.7%

 

Annual Expenses:

$8/acre

 

Inventory Data over Life of the Forest Stand (Ages 0-60 years)

Stand age (vol/acre)

15 5.13

20 13.98

25 25.22

30 35.11

35 44.19

40 51.85

45 56.79117447

50 63.03092644

55 68.76322479

60 74.05934015

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