Question

The owner of a tree farm decides to harvest a stand of mature white pine trees. Each white pine yields approximately 62 board feet, the amount of lumber that can be milled from a 10-foot log that is 14 inches in diameter. The density of white pines is 120 trees per acre. The wholesale price-per- board-foot is $1.85.
a. What is the value per acre of white pines?
b. If the owner decides to harvest 18 acres of white pines, how much money will he make?
c. The owner must hire a timber company to cut down the trees. The timber company charges 30% of the wholesale value of the trees to perform this service. How much does the owner make after paying the timber campany? (Round to the nearest dollar.)
d. If the owner waits another 10 years, he will increase the yield of each tree to 127 board feet. Assuming the price-per-board-foot remains the same, how much more will he make if he waits?

Answer 1

Answer:

$13764 ; $247752 ; $173426 ; $259740

Explanation:

1 white pine = 62 board feets

Density of white pine = 120 trees per acre

Wholesale price per board foot = $1.85

The value per acre of white pines

(Number of board foots per white pine) * (Number of white pines per acre) * (wholesale price per board foot)

(62 * 120 * $1.85) = $13,764

B.) Amount Realized on harvesting 18 acres

Value per acre * 18

$13764 * 18

= $247752

C.)

Amount charged by timber company = 30% of wholesale price

Total wholesale amount realized on 18 acre = $247752

Amount left after paying timber company :

$247752 - (0.3 * $247752)

= $173426.4

= $173426 (nearest dollar)

d.

Amount made now : = $247752

After 10 years :

The value per acre of white pines

(Number of board foots per white pine) * (Number of white pines per acre) * (wholesale price per board foot)

(127 * 120 * $1.85 * 18) = $507492

$507492 - $247752 = $259740