tations. Also no data on pulpwood volume yields of white pine stands 

 managed only for pulpwood are available. 



Costs 



Establishment Cost: An establishment cost of $35.00 per acre was 

 used (12). This includes site preparation, planting stock, and the plant- 

 ing operation. In general it includes all cost associated with the initi- 

 ation of the plantation. 



Annuity: An annual carrying charge is levied to cover the annual 

 costs of taxes, fire protection, and general management expenses. A 

 single valued annuity is used. This annuity is influenced by the length 

 of rotation; as the length of rotation increases, the annuity increases. 

 The annuity is determined from a base value of $1.00 per year in- 

 creased at the rate of 15 percent decade. However, a single value is 

 used for the annuity — that value which is calculated to the year of 

 harvest, i.e., in 65 years the annuity is $2.31 as shown in Table 5. 

 Thus the annual carrying charge on a 65-year rotation is $2.31. A 

 single value is used as the annuity for simplicity of calculation. A 

 single value also increases the actual amount paid over the basic vari- 

 able annuity of $1.00 increased at 15 percent per decade. The actual 

 amount paid for the single valued annuity increases the outlay by 

 approximately $50.00 in 65 years. 



Thinning and Harvest Costs: The expenses associated with each 

 thinning operation are assumed to be 12 percent of the dollar value 

 of the sawlogs and pulpwood cut during the thinning. The expenses 

 associated with each harvest operation are assumed to be ten percent 

 of the dollar value of the sawlogs and pulpwood harvested. These 

 percentages are based on current charges consulting foresters in New 

 Hampshire. 



Determination of Financial Yield 



To compute the financial return for various rotation ages, given 

 the previous data on physical volumes, prices, and costs, the only fur- 

 ther requirement is a table showing the present value of $1.00 at 



Table 5. Annual Carrying Costs 



with Initial Base of $1.00 

 Increased 15 Percent per Decade 



Carrying 

 Years Costs 



0-10 1.00 



10-20 1.15 



20-30 1.32 



30-40 1.52 



40-50 1.75 



50-60 2.01 



60-70 2.31 



70-80 2.65 



