=+13 Clipper owns 100 acres of mature woodland and is trying to decide when to harvest the trees. If it harvests immediately the net cash flow, after paying the professional log-

gers, will be £10,000. If it waits a year the trees will grow, so that the net cash flow will be £12,000. In two years, £14,000 can be obtained. After three years have elapsed, the cash flow will be £15,500, and thereafter will increase in value by £1,000 per annum.