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144 FORESTRY 



Expectation Value is the present value of all yields 

 which may be looked for from an estate, minus the present 

 value of all estimated expenditure to the date of realisation. 

 It is employed chiefly when estimating the value of the soil, 

 and it 'forms the best standard for judging the profitableness 

 of the forest's management. It also affords a means of 

 gauging the respective merits of different systems of tree 

 raising, of agriculture combined with forestry, and so forth. 

 Only rarely is the expectation value used for calculating the 

 sale value of the forest. 



The Cost Value of a forest property represents the pre- 

 sent value of the outlays for formation and maintenance to 

 date, less the present value of all receipts. It is chiefly used 

 for estimating the value of younger woods. Of the cost 

 value of the soil one can only speak when the land has been 

 reclaimed from an unproductive state by the expenditure of 

 money. The sum spent, along with interest, then constitutes 

 its cost value. Examples of this may be found where peat 

 bogs have been redeemed, or drifting sand permanently fixed. 



By the term Rental Value is meant the capitalised rental 

 that a forest is able to yield. The organisation and treat- 

 ment being all that they should be, the rental value forms the 

 best standard of valuation. Where proper attention has not 

 been given, however, its employment in the sale of forests 

 often proves unfavourable to the interests of the vendor. 



In practice it is always best to choose the method of 

 calculation for which the most reliable data are available ; 

 thus for young woods the cost value should generally be 

 chosen, and for middle-aged woods the expectation value. 



