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12.The cost of reforestation of a tract of land is $20,000. The future value of the timber harvested, calculated in current (Year 0) timber prices, is: Year Value 15 16 17 18 19 20 200,000 250,000 300,000 325,000 350,000 350,000 375,00 If the real cost of capital is 12%, calculate the optimal year to harvest assuming an indefinite number of replanting cycles. Ignore taxes. Hint: use an EAA analysis. a. Year 15 b. Year 16 C. Year 17 d. Year 18 e. Year 19 f. Year 20 37
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