Enough land to grow one tree

Reference no: EM13891404

You have enough land to grow one tree. The height of your tree (in feet) equals 100*(square root of age of the tree) ! The cost of cutting down the tree is $0. The interest rate is 4%, and the price of one foot of the tree is $16. a. What is your optimal cutting strategy? Your goal is to maximize the PDV of profits. b. Ecotourists from Berkeley are willing to pay you $X dollars each year to look at your tree. Write out an equation for X so that you are indifferent between: 1) having the ecotourists visit and 2) harvesting the tree and sacrificing the ecotourism payment.

Reference no: EM13891404

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