Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Optimal Harvesting Age
Let there be a per unit regeneration cost C. The timber growth is measured by volume V(T) which is a function of the age of the timber T. Attaching a price P, the maximum present value of the stand represented by λ is,
Equation 1
The first order condition gives us
Equation 2
PV' (T) = iPV (T) + i λ
Where V’ is the first order derivative of V.
The results indicate that, the Faustmann harvest age TF, is the one at which the marginal increase in value from delaying the harvest equals opportunity cost of delaying the harvest. The opportunity cost includes the potential interest income foregone on the delayed receipt of current harvest revenues plus the interest cost of delaying receipts from future harvest cycles. The second component reflects an implicit rental cost of land. The optimum T is popularly known as 'Faustmann Rotation Age'. Let us denote it by TF.
The first order condition equation 2 can be rewritten to give us the Faustmann condition
Equation 3
Equation 3 can be interpreted as, 'hold timber stocks uncut until the rate of growth in the combined asset value of timber and land just equals market rate of interest'.
why is public finance important?
Discuss the basic features of international policy coordination. There may be two sources of interdependence between national economic policies, club goods and horizontal spill
Q. Importance of heterogeneity? The importance of heterogeneity for public policy process can be summarized in two propositions. - Heterogeneity or conflict of interests is
Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4
Question: You are the Head of the Public Relations Department of an airline company. Your Chief Executive has asked you to make a presentation on crisis management to senior s
what is frugal economy and government economy
Requisite Modifications to National Income Accounts Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetE
Are there any welfare or subsidy payments that should be renewed or added? 2.What are the costs and consequences of providing the subsidies and welfare? 3.Are there any current sub
The most significant area or tool for making a suggestion to a journalist or media is the press release, which is more available these days. One has to put, a press release is a ps
Part I. We have examined federal public policies in the context of the democratic political system in the US. Types of policy legislation/behavior fall into 3 main types. A
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd