It was studied Real Options approach as a financial-economic tool for strategic decision-making in the determination of optimal harvesting age in two kinds of forestry exploitation, a high-value one and a pulp-producing unit. It is assumed that the projection of selling prices of the byproducts follows a Brownian geometric stochastic process, while production is determined by means of a simulation of forestry turnover. The decision of when to harvest arises from the comparison, at each period, of the cash-flow at each node ( FFij(t)) of a binomial lattice and its expected value in the next period (Xt+1.e-∆t ). The Real Values approach indicates that the optimal ages are at 18 years for high-value units and 17 years for pulp producing ones.
binomial grid; shift; exotic option
