A tract of 10 hectares has been harvested and the choice is between leaving it to regenerate naturally or planting it with young seedlings.If left to reforest naturally at no cost, in 20 years the tract would yield 300 cubic metres per hectare of an inferior species worth only ¥20 per cubic metre.
If planted immediately at a cost of ¥1000 per hectare, in 20 years the tract would yield 400 cubic metres per hectare worth ¥25 per cubic metre.
If the discount rate is 5%(approximate value of the discount factor is 0.4 ), what is the benefit/ cost ratio of the investment in planting?