140 VALUATION OF THE GROWING STOCK. 



(a) the calculation has been made with the expectation 



value of the soil ; 



(b) the receipts and expenses were of the normal amounts, 



and 



(c) the wood is fully stocked, or normal, at the end of the 



rotation. 



Proof. Let in = r, then, 

 r G e =(S+E) (l-op>'- 



By introducing the expectation value of the soil, the above 

 equation becomes : 



which, after reduction, leads to : 



'G c = Y r . 



(3) The Rate of Interest. If the calculation is made with 

 the maximum expectation value of the soil, and the receipts 

 and costs corresponding to it, then a higher rate of interest 

 yields a lower cost value, and vice versa. 



If the above assumptions do not hold good, it depends on the 

 value of the soil and the amounts of receipts and costs which 

 are introduced into the calculation, whether a higher rate of 

 interest gives a greater or smaller cost value of the growing 

 stock. 



3. Sale Value, or Utilization Value, of the Growing Stock of a 

 Whole Wood. 



Under the sale value of the growing stock of a wood is 

 understood that price which it would realize in the open 

 market. 



A wood may be sold under one of two conditions : 



