You own a tract of trees and are deciding whether to harvest them now or next year.If you harvest them now,you can invest the proceeds and get a return of 5% on your investment.What should you do?
A)Let the trees grow as long as their dollar worth increases by more than 5%
B)Let the trees grow
C)Cut down the trees,and sell them
D)Let the trees grow as long as their dollar worth increases by less than 5%

Question

You own a tract of trees and are deciding whether to harvest them now or next year.If you harvest them now,you can invest the proceeds and get a return of 5% on your investment.What should you do?​
A)​Let the trees grow as long as their dollar worth increases by more than 5%
B)Let the trees grow
C)Cut down the trees,and sell them
D)​Let the trees grow as long as their dollar worth increases by less than 5%

Quizplus · Accepted Answer

In this case, it is best to let the trees grow as long as their dollar worth increases by more than 5%. This is because if the increase in their dollar value is more than the return on the investment (5%), it is more profitable to wait and harvest them later. By waiting, the trees will grow bigger and potentially increase in value, allowing for a higher return when eventually sold. However, if the increase in dollar value is less than 5%, it would be better to harvest and invest the proceeds now to get a higher return.

You Own a Tract of Trees and Are Deciding Whether