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'.
what are the principles of multi unit finance and principles of grant design
Normal 0 false false false EN-IN X-NONE X-NONE MicrosoftInternetExplorer4
explanation and justify the condition of pareto optimality and verify the defination of contrect curve. statment; reallocation of the resources from 1 efficient point to another ef
In economic literature policy instrumentation has usually been discussed from normative point of view. In particular, the analytical apparatus of welfare theory is well equipped t
Q. Who permits government whatever it does? The simple answer can be: people in a democracy and the monarch/dictator in a monarchy/dictatorship. But neither monarchy exists in
strugling with research variables and problem
critically explain the importance and reasons
The marginal external cost associated with the emissions of sulfur dioxide is estimated to be $30 per pound of this chemical per year. Assume that each ton of steel produced per ye
various credit arrangements
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