Forestry The value of a tract of timber is V ( t ) = 100 , 000 e 0.8 t where t is the time in years, with t = 0 corresponding to 2010. If money earns interest continuously at 10%, then the present value of the timber at any time t is A ( t ) = V ( t ) e − 0.10 t . Find the year in which the timber should be harvested to maximize the present value function.
Forestry The value of a tract of timber is V ( t ) = 100 , 000 e 0.8 t where t is the time in years, with t = 0 corresponding to 2010. If money earns interest continuously at 10%, then the present value of the timber at any time t is A ( t ) = V ( t ) e − 0.10 t . Find the year in which the timber should be harvested to maximize the present value function.
Solution Summary: The author calculates the year in which timber should be harvested to maximize the present value function.
where t is the time in years, with t = 0 corresponding to 2010. If money earns interest continuously at 10%, then the present value of the timber at any time t is
A
(
t
)
=
V
(
t
)
e
−
0.10
t
.
Find the year in which the timber should be harvested to maximize the present value function.
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, calculus and related others by exploring similar questions and additional content below.
Solve ANY Optimization Problem in 5 Steps w/ Examples. What are they and How do you solve them?; Author: Ace Tutors;https://www.youtube.com/watch?v=BfOSKc_sncg;License: Standard YouTube License, CC-BY
Types of solution in LPP|Basic|Multiple solution|Unbounded|Infeasible|GTU|Special case of LP problem; Author: Mechanical Engineering Management;https://www.youtube.com/watch?v=F-D2WICq8Sk;License: Standard YouTube License, CC-BY