Seneca Timber Lands owns several acres of prime timberland. If the firm harvests the timber today, they could sell it for $4.5 million. However, Seneca believes that the timber will be worth $5.2 million next year. Seneca should exercise the option to:
A) Abandon.
B) Wait.
C) Quit.
D) Retire.
E) Expand.

Question

Quizplus · Accepted Answer

Seneca should choose to wait because the value of the timber is expected to increase from $4.5 million to $5.2 million next year, indicating a potential for higher profit by delaying the harvest.

Seneca Timber Lands Owns Several Acres of Prime Timberland