Timing
Example - continued
You may harvest a set of trees at anytime over the next 5 years. Given
the FV of delaying the harvest, which harvest date maximizes current
NPV?58. 5
1.10NPV if harvested in year 1 = 64.4 =
NPV ($1000s) 50 58.5 64.0 67.2 68.3 67.9
0 1 2 3 4 5
Harvest Year