THE FINANCIAL ROTATION. 201 



compound interest, the highest net return. The financial 

 rotation is, therefore, identical with that which 



(a) Gives the maximum soil rental as expressed by the 

 formula : 



Soil rental = S e X 'op 



Y r +T a xl'op r - a +. . . + T (/ xl'op r -y-cxl'op r 

 l'opr-1- 



'op 

 (See page 154.) 



(6) Or yields the highest profit : 



P = S e -S e . 

 (See page 158.) 



(c) Or yields the maximum mean annual forest per cent. : 



(See page 165.) 



Of these, the first formula is the most convenient, and the 

 procedure is as follows : In the forest for which the financial 

 rotation shall be determined, a number of typical woods are 

 examined and as many data as possible collected. These can 

 be augmented by data taken from suitable yield tables if such 

 are available. Then the soil rental is calculated for various 

 rotations, and that, for which the rental becomes a maximum, 

 is the financial rotation. 



In order to explain the method the appended table has been 

 calculated from the money yield table for the Scotch pine 

 given at page 122. In calculating that table it has been 

 assumed that the cost of formation comes to 60 shillings, 

 the annually recurring costs to 3 shillings, and that the general 

 per cent, p is = 2| per cent. It has also been assumed that the 

 thinnings during the several periods of ten years have been 

 made at the end of each period ; for instance, the thinnings 

 during the period of 40 50 are assumed to have been made 

 in the year 50. 



