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'.
Are there any current subsidy or welfare issues that are being discussed or addressed in parliament or municipalities?
what are the principles of public debt?
In planning activities how are the decision arrived? what are the different stages of analysis? which factors can be ignored and why? state the manner in which a degree of success
wat are futures and option markets
Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4
Since complexity theory as a tool, has not been included in the standard tool kits of our economics courses, it is pertinent to have a basic idea of before proceeding to apply to t
The monetarist and fiscal controversy is still on. The recent history of the U.S. looks like a success story of the monetarists; but besides pure luck, it involved strong element o
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