168 THE FINANCIAL RESULTS OF FORESTRY. 



Kental of soil under agriculture = 



Annual gross rental annual costs = net letting value. 



The decision can also be based upon the profit in each case, 

 when the formula stands as follows : 



r+ T a X 1 



=r- 



where Y f represents the annual gross income from agricul- 

 ture, e' the annual expenses under agriculture, and S the cost 

 value of the soil. 



2. Choice of Species and Sylvicultural System. 



In both cases the choice is determined by the expectation 

 value of the soil. It depends on : 



(a) the value of the returns and the time when they occur. 



(b) the cost of formation, and the amount of the annual 



expenses if they differ for different species or different 

 sylvicultural systems. 



(c) the rate of interest. 



3. Choice of Method of Formation. 



The choice depends on the differences in the expectation 

 value of the soil under the various methods of formation, such 

 as planting, sowing, or natural regeneration. 



4. Choice of Method of Tending, especially in respect of the 



Time and Strength of Thinnings. 



This is best effected by calculating the expectation value of 

 the growing stock for the different methods of thinning, and 

 comparing them. 



5. Determination of the Financial Rotation. 



The financial rotation, or that which gives the best financial 

 results, may be determined in various ways, as : 



