136 VALUATION OF THE GROWING STOCK. 



Rate of interest = 2 per cent. 

 Value of soil = 250 shillings. 



Annual expenses =3 to be incurred at the end of 

 each year : 



2225 + 67 x r025 30 + 86 x r025 20 +91 x T025 10 



45r _ -(250 + 120) (1-025 35 -!) 



1-025 35 

 *G e = 891 shillings = 44 11 



~b. Notes on the Expectation Value of the Growing Stock. 



The expectation value of the growing stock depends on the 

 following matters : 



i. THE ABSOLUTE AMOUNT OF RECEIPTS AND EXPENSES. 

 Regarding the value of the soil to be introduced into the 

 calculation it should be noted, that the maximum expectation 

 value should be chosen if the soil is again to be used for forest 

 purposes ; if the soil can be more profitably used for agricul- 

 ture or other purposes, the correspondingly increased value 

 must be introduced into the account. 



ii. THE LENGTH OF THE ROTATION. 



In the case of fully-stocked or normal woods, the highest 

 expectation value is obtained for that rotation for which the 

 expectation value of the soil culminates, provided that value is 

 introduced into the account. If a larger value of soil is intro- 

 duced, then the maximum expectation value of the growing 

 stock is obtained for a lower rotation than that for which the 

 expectation value of the soil culminates, and vice versa. 



In the case of insufficiently stocked or abnormal woods, the 

 rotation for which the highest expectation value of the growing 

 stock is obtained, can only be determined by experimental 

 calculations based upon the data of each special case. 



Example. Taking the same data as before. 



For a rotation of 70 years : 



1683 + 67 x l-025 20 + 86 x T025 10 



shillings. 



