A Company Owns a Tract of Timber That Will Keep

question 91

Multiple Choice

A company owns a tract of timber that will keep growing for a number of years.It calculates that the timber's value less the cost of harvesting is currently $50,000 and that this figure will grow by 10% in the next year and by 5% in the following year.If the cost of capital is 8%,when should the company harvest the timber?

• A) today.
• B) year 1.
• C) year 2.
• D) harvest a third of the timber each year.

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Definitions:

Treble Damages

A legal principle that allows a court to triple the amount of damages awarded to a plaintiff in order to punish the defendant for particularly harmful behavior.

Infringement

Unauthorized use or violation of someone else's rights or agreement.

Patent Act

Legislation governing the rights of inventors to protect their inventions through the grant of patents, detailing the process of obtaining and enforcing patent rights.

Design Patent

A legal protection granted to the ornamental design of a functional item for a period of 15 years in the United States.