Gce Model Questions Vol1 2021 Agricultural Science Question 6
Practice objective / multiple choice question 6 from the 2021 Gce Model Questions Vol1 Agricultural Science examination.
A forest stand follows the volume growth function \(V(t)=0.04t^{2}+0.5t\) (m³ ha⁻¹), where \(t\) is the age in years. Timber sells for \(\$120\) per m³ and regeneration costs \(\$250\) ha⁻¹. The annual discount rate is \(6\%\). Using the land expectation value (LEV) formula \(\text{LEV}(T)=\dfrac{P\,V(T)-C}{(1+i)^{T}-1}\), where \(P\) is price, \(C\) regeneration cost, \(i\) discount rate and \(T\) the rotation age, determine the integer rotation age (in years) that maximises LEV.
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This is Gce Model Questions Vol1 2021 Agricultural Science Question 6. It is one of the objective questions from the 2021 Gce Model Questions Vol1 Agricultural Science examination.
Difficulty level: Hard .
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