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Consider a forester who must decide when to cut down a growing tree. Suppose the net value of the tree at any continuous time t
Consider a forester who 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. The present discounted value of the tree owner 10 years after it is planted is [PDV].
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