If the increase income from sale of a nonrenewable resource in the current period is less than the present value of income sale of the resource in the next period, the owner should:
A)wait to see what will happen in the future.
B)sell all of the resource in the next period.
C)sell some of the resource now and some in the next period.
D)sell all of the resource now.

Question

Quizplus · Accepted Answer

The owner should wait and sell all of the resource in the next period because the present value of the income from selling the resource in the next period is higher than the income from selling it now. This suggests that waiting will maximize the owner's revenue from the resource.

If the Increase Income from Sale of a Nonrenewable Resource