Gce Model Questions Vol1 2019 Agricultural Science Question 18
Practice objective / multiple choice question 18 from the 2019 Gce Model Questions Vol1 Agricultural Science examination.
A pine plantation is managed by clear‑cutting the stand at a uniform rotation age T (years). Each tree yields 0.5 m³ of timber per year after the stand reaches age 5 years, so the total timber volume per hectare at harvest is \( V = 0.5\,(T-5) \) m³ (assume T > 5). The timber price at the time of harvest is \( P_T = 120\,(1.02)^{T} \) dollars per m³, reflecting a 2 % annual price increase. Harvesting costs are $30 per m³ and the planting cost is $200 per hectare, incurred at the start of each rotation. Using a discount rate of 5 % per annum and the Faustmann formula, determine the integer rotation age T (in whole years) that maximises the net present value per hectare. Give the optimal T.
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About This Question
This is Gce Model Questions Vol1 2019 Agricultural Science Question 18. It is one of the objective questions from the 2019 Gce Model Questions Vol1 Agricultural Science examination.
Difficulty level: Hard .
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