Consider a forester who must decide when to cut down a growing tree. Suppose the net value of the tree at any continuous time t is given by f(t) = 10exp{0.01t2}. Assume also that the (continuous) market interest rate is given by r = 0.04. The present discounted value of the tree owner 10 years after it is planted is [PDV]. (NOTE: Write your first
Consider a forester who must decide when to cut down a growing tree. Suppose the net value of the tree at any continuous time t is given by f(t) = 10exp{0.01t2}. Assume also that the (continuous) market interest rate is given by r = 0.04. The present discounted value of the tree owner 10 years after it is planted is [PDV]. (NOTE: Write your first
Managerial Economics: A Problem Solving Approach
5th Edition
ISBN:9781337106665
Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor
Chapter5: Investment Decisions: Look Ahead And Reason Back
Section: Chapter Questions
Problem 5.2IP
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(see attached)) What is the Present Discounted Value? Please show the steps. I thought it was 12.26 but when i checked online, multiple people said that was wrong on Chegg.
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