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CHAPTER IT. 



VALUATION OF FOREST SOIL. 



THE soil can be utilized in two ways : 



Either by being used direct, as for mining, quarrying, con- 

 struction of dwellings, etc. ; 



Or by letting it produce other goods, as field- or forest-crops. 



In each of these cases the soil may have a different value. 

 Forest valuation ascertains the value of the soil under the 

 supposition that it is used for the production of forest 

 crops; for this purpose it determines the expectation, cost, 

 and sale value. 



SECTION I. THE EXPECTATION VALUE OF FOREST SOIL. 



1. Method of Calculation. 



In conformity with the definition given at page 114, by 

 the expectation value of forest soil is understood the sum of 

 the present values of all returns expected from the soil in the 

 course of time, less the present value of all expenses which 

 must be incurred to obtain those returns. 



a. Present Value of Returns. 



(1) Final Yields. Let the rotation contain r years, and let 

 the value of each final yield, less cost of harvesting, = Y r , to be 

 realized every r years, then the present value of all final yields 

 for ever amounts, according to formula VIII. (page 119), 

 to: 



y 



Present value of all final yields = - r _ . 



To// 1 



