Chapter 12.2, Problem 74E

To determine

To calculate: The age at which a Douglas fir tree must be harvested to maximize its present value and the amount up to the nearest constant dollar worth at that time if the general inflation rate of $5\%$ per year is anticipated and the present value of an item worth of $\$v$ in $t$ year’s is $p=v\cdot {\left(1.05\right)}^{-t}$. The approximate volume of a Douglas fir tree of age $t$ years is represented by $V=\frac{22,514}{1+22,514t^{-2.55}}$. The lumber is sold at the amount of $\$10$ per cubic foot.