Problem: You own 500 acres of timberland, with young timber worth $40,000 if logged now. This represents 1,000 cords of wood worth $40 per cord net of costs of cutting and hauling. A paper company has offered to purchase your tract for $140,000. Should you accept the offer? You have the following information:
Years Yearly Growth Rate of Cords per Acre
1-4 16%
5-8 11
9-13 4
14 and subsequent year 1