128 VALUATION OF FOREST SOIL. 



2. Matters ivhich affect the Expectation Value of the Soil. 



As indicated by the formula, the expectation value of the 

 soil depends on 



(a) The absolute amount of receipts and expenses. 



(b) The length of the rotation. 



(c) The time when the intermediate returns are realized. 



(d) The time when the costs of production have to be 



incurred ; and 



(e) The rate of interest with which the calculation is made. 

 Each of these matters must be further considered. 



a. The absolute amount of Receipts and Expenses. 



^These are influenced, not only by careful management, but 

 also by the choice of species. If, for one and the same piece 

 of land, the calculation is made for different species, the ex- 

 pectation values thus obtained are likely to differ considerably ; 

 hence the importance of selecting the most suitable species for 

 each piece of land. 



b. The Length of Rotation. 



As the growing stock has, in the majority of cases, very little 

 value during the first part of the life of a wood, so that the 

 yield would not even cover the cost of harvesting, it follows 

 that the expectation value of the soil may under a very short 

 rotation be negative. With advancing age the value of the 

 growing stock increases, so that the expectation value of the 

 soil becomes positive ; it goes on augmenting until it reaches a 

 maximum, after which period it falls again. A second maximum 

 may occur owing to a sudden heavy increase in the value of the 

 growing stock. Under an excessively high rotation the expec- 

 tation value of the soil would again become negative. 



Example. Making the calculation for successive rotations 

 for a Scotch pine wood, with the same conditions as before, Jhe 

 following values are obtained for the expectation value : 



