Question: A classic problem in management of forests is determining when it is most economically advantageous to Page 264 cut a tree for lumber. When the

  1. A classic problem in management of forests is determining when it is most economically advantageous to Page 264 cut a tree for lumber. When the tree is young, it grows very rapidly. As it ages, its growth slows down. Why is NPV maximized if you cut the tree when its growth rate equals the discount rate?

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