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 5.1320 13.9825 25.2230 35.1135 44.1940 51.8545 56.7911744750 63.0309264455 68.7632247960 74.05934015

To calculate the best rotation (most revenue return), the manager wants to maximize the net income.…

Answered: These data were derived from a forest…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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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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