Olivia is researching the growth of sequoia trees and needs your assistance.  She bought a Sequoia seedling from the gift shop at Sequoia National Park 20 years ago measuring 0.7 inches and planted it in her back yard.  She is worried this tree is going to overtake her property because her nephew sprinkled magical exponential growth dust from Jack in Jack and the Bean Stalk. Review her research below to answer her questions. Trees Growth Rates   Growth Rate Annual Height Fast At least 2 feet Medium 1 to 2 feet Slow At most 1 foot     The giant sequoia grows at a medium rate of an average of 18 inches per year to a height of 60 – 200 feet, a spread of 25 – 35 feet at maturity, and lives up to 3,000 years; however, Jack told my nephew the tree will now grow at a continual exponential rate of 17% each year. Part A: Can I use a model to assist me in predicting the height of my tree at different stages of its life?  If so, create a model while explaining each step in the process and label each variable in context to her situation. Part B: How tall is my sequoia in 10 years? Explain your process so that she can replicate this to find the height of her tree after 50 years. Part C: A skyscraper is being built nearby with an overhang 150 feet directly above my property. Will the tree hit the skyscraper during my lifetime?

EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 13P
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Olivia is researching the growth of sequoia trees and needs your assistance.  She bought a Sequoia seedling from the gift shop at Sequoia National Park 20 years ago measuring 0.7 inches and planted it in her back yard.  She is worried this tree is going to overtake her property because her nephew sprinkled magical exponential growth dust from Jack in Jack and the Bean Stalk. Review her research below to answer her questions.

Trees Growth Rates
 
Growth Rate
Annual Height
Fast At least 2 feet
Medium 1 to 2 feet
Slow At most 1 foot
   


The giant sequoia grows at a medium rate of an average of 18 inches per year to a height of 60 – 200 feet, a spread of 25 – 35 feet at maturity, and lives up to 3,000 years; however, Jack told my nephew the tree will now grow at a continual exponential rate of 17% each year.

Part A:
Can I use a model to assist me in predicting the height of my tree at different stages of its life?  If so, create a model while explaining each step in the process and label each variable in context to her situation.

Part B:
How tall is my sequoia in 10 years? Explain your process so that she can replicate this to find the height of her tree after 50 years.

Part C:
A skyscraper is being built nearby with an overhang 150 feet directly above my property. Will the tree hit the skyscraper during my lifetime?  Explain why or why not

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