Resource economics questions.

Congratulations! you have won a cash prize from Tatu Mzuka that you can use to invest in any natural resource project in Tanzania. You have two payment options

1. Receive 50 million now or
2. Receive 50 million after three years.

As an economist which option will you choose? Give reason(s) for your choice.

Assume that you were given the running costs for the power tiller for each year as follows.

What is the daily cost (including depreciation) for the power tiller for each of the five years by the declining balance method.

When evaluating a resource such as forest, one may either use income value approach or cost based approach. Discuss the meaning of the two methodologies.

    What is the purpose of calculating depreciation?
    

A power tiller was purchased in 2013 for TZS 900,000/=, its anticipated life time is 5 years and the estimated scrap value in TZS 100,000/=. What is the yearly depreciation by straight-line method(33.5%).

Assume that you are a district valuer. You`re tasked to evaluate a 15 year`s old planted forest that has been affected by a fire set by a neighbour. The cost of land was TZS 2,000 per ha. The interest rate is 8%. Other estimates are provided in the table below. By using cost based approach, estimate the net value of the forest at the age 15.

A Juma Manufacturing Company at Juakali in Horohoro Tanzania border with Kenya is producing Souvenir using Brachylaena hulensis from Mkinga district in Tanzania. The total weekly cost (in TZS) of producing 500 lots of Souvenir is given by C(X)=10,000+90X-0.05X² , where X is lots of Souvenir.

1. Determine the marginal cost function
2. Find the marginal cost at a production level of 500 lots of Souvenir per week and interpret the results.
3. Find the exact cost of producing the 501^st lots of Souvenir.