enveconhw4 - Kelley Benham AEC 3233 Homework 4 I calculated...

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Kelley Benham AEC 3233 Homework 4 I calculated the optimal rotation period for this stand of trees. I used the formula ((Revenue – harvest cost)/(1+r)^t))-planting cost. This was used for both single rotation and sustained. This is shown in table 1. The first chart shows the tree growth. The second chart shows the net present value of each management plan. If the interest rate falls, the stand should be harvested sooner. This is shown in table 2. Chart 3 shows the net present value with each interest rate with a single rotation. Table 1 Price $3.75 /cu. Ft. Harvest Cost $0.75 per cu. Ft. r = 3.00% $1,200 Year Volume Revenue Planting Cost Harvest Cost NPV (Single) NPV (Sustained) 2.00 390.00 1462.50 $1,200 $292.50 ($97.16) ($1,692.61) 4.00 1520.00 5700.00 $1,200 $1,140.00 $2,851.50 $25,571.03 6.00 3330.00 12487.50 $1,200 $2,497.50 $7,166.47 $44,097.07 8.00 5760.00 21600.00 $1,200 $4,320.00 $12,440.99 $59,076.62 10.00 8750.00 32812.50 $1,200 $6,562.50 $18,332.47 $71,637.47 12.00 12240.00 45900.00 $1,200 $9,180.00
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enveconhw4 - Kelley Benham AEC 3233 Homework 4 I calculated...

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