Harvesting Forests The following equation models the approximate volume in cubic feet of a typical Douglas fir tree of age t years.26
The lumber will be sold at $10 per cubic foot, and you do not expect the price of lumber to appreciate in the foreseeable future. On the other hand, you anticipate a general inflation rate of 5% per year, so the present value of an item that will be worth $v in t years’ time is given by
At what age (to the nearest year) should you harvest a Douglas fir tree to maximize its present value? How much (to the nearest constant dollar) will a Douglas fir tree be worth at that time?
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Chapter 5 Solutions
Applied Calculus, Loose-leaf Version
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