Chapter 1.2, Problem 24E

Round all answers to two decimal places unless otherwise indicated.

24. Timber Stumpage Price The following table shows timber stumpage prices for pine pulpwood in two regions of the American South. Prices are in dollars per ton and were recorded at the start of the indicated year.

Year	Southeast	Mid-Atlantic
$2002$	$6.50$	$4.00$
$2005$	$7.50$	$6.70$
$2007$	$7.00$	$10.00$

a. For the Mid-Atlantic, what is the average rate of change per year in price from $2002$ to $2005$?

b. Use your answers to part a to estimate the price in the Mid-Atlantic region at the start of $2004$. (The actual price was $\$6.40$ per ton.)

c. For the southeast, what is the average rate of change per year in price form $2005$ to $2007$?

d. Use your answer to part c to estimate the price in the Southeast at the start of $2008$.

e. For each region, find the percentage increase in price from $2002$ to $2007$.

f. On the basis of your answer to part e, in the absence of other factors, would an investor in timber be better advised to choose the Southeast or the Mid-Atlantic?