Question
A forester must decide when to cut down a growing tree. Suppose the net value of the tree at any continuous time t is given
A forester must decide when to cut down a growing tree. Suppose the net value of the tree at any continuous time t is given by f(t) = 10exp{0.01t2}. Assume also that the (continuous) market interest rate is given by r = 0.04. What is the present discounted value of the tree owner 10 years after it is planted?
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Essentials of Economics
Authors: N. Gregory Mankiw
8th edition
1337091995, 978-1337515351, 1337515353, 978-1337091992
