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You are considering buying a tract of recently harvested timberland that's suitable for pine plantation management. If you expect the following first rotation values, what
You are considering buying a tract of recently harvested timberland that's suitable for pine plantation management. If you expect the following first rotation values, what is the maximum price you would bid for the land? Assume you are using a guiding rate of 6.5%. Revenues: Thinning income at age 18 = $615/acre Final harvest income at age 34 = $2,200/acre Costs: - Site preparation and planting in year 0 = $215/acre Herbaceous weed control in year 12 = $60/acre Annual property taxes = $6/acre/year
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