138 VALUATION OF THE GROWING STOCK. 



iii. THE AGE OF THE WOOD. 



The expectation value of the growing stock rises (given a 

 fixed rotation) with the age of the wood, but not in exact 

 proportion. If the thinnings are made after regular intervals, 

 say every 10 years, it generally happens" that immediately 

 before making thinnings the expectation value is slightly 

 higher, than immediately after the thinning has been made. 

 For instance, if a thinning is made in the year 60, the 

 expectation value of the growing stock for the year 59 will 

 probably be higher than for the year 61. 



Immediately after the area has been stocked in the beginning 

 of the rotation the expectation value of the growing stock is 

 equal to the cost of formation, and at the end of the rotation it 

 is equal to the value of the final yield. 



iv. THE RATE OF INTEREST WITH WHICH THE CALCULATION is MADE. 



A high rate of interest gives a low expectation value of the 

 growing stock, and vice versa, similar to what has been shown 

 for the expectation value of the soil. 



2. Cost Value of the Growing Stock of a Whole Wood. 



The cost value of the growing stock of a wood now m years 

 old, is equal to the present value of all costs of production less 

 the present value of all returns which the wood ha3 yielded 

 before the year m. 



a. Method of Calculation. 



Costs of Production. (1) The present value of the rent of 

 the soil during m years comes to : 



Sxl'op m -S = S (l'op m -l). 



(2) The present value of the annual expenses during m 

 years (see Formula IV.) : 



= e x 1 -op m ~ l + ex l'op m ~* + . . . + e, 





