A Farmer Spends $100 000 to Plant Fruit Trees

question 25

Multiple Choice

A farmer spends $100 000 to plant fruit trees. It will take four years for the trees to provide a usable crop. He estimates that every year for 20 years after that he will receive a crop worth $10 000 per year. If the discount rate is 8%, what is the net present value (NPV) of this investment?

• A)-$12 897
• B)-$27 834
• C)$108
• D)$3 268

Understand the importance of well-defined and enforced property rights in sustainable resource management.

Recognize effective policies for reducing fishery catch sizes and preventing overfishing.

Understand the basic principles and outcomes of bargaining and market transactions in resource management.

Recognize the significance of sustainable resource management practices in both forestry and fisheries.

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Definitions:

Escalating Commitment

The phenomenon where people become increasingly committed to a decision or course of action even when faced with negative outcomes or evidence of failure.

Mediation

A conflict resolution process where an impartial third party helps disputing parties find a mutually acceptable solution.

Relationship Goals

Objectives or milestones that individuals aim to achieve within their interpersonal relationships.

Substance Goals

Objectives that aim for the achievement of tangible, measurable outcomes or results in an organization.