INCREMENT ON INVESTED CAPITAL 453 



annual outgoings less any annual sum represented by a sporting 

 rent, etc.) capitalised at 25 or 28 years' purchase, or as may 

 be deemed expedient. 



Now, it is difficult to assign any particular value to the 

 land over and above its capitalised sporting value, for, as 

 stated elsewhere, when once planted, it has practically no 

 value as agricultural (farming) land, and can only be 

 profitably utilised by replanting. 



If the sporting be worth is. 6d. an acre (and this is ample 

 if a large area of high forest be under consideration), the 

 total capital value of the land may be usually taken at from 

 3 to 7 an acre for planting purposes. 1 



If very great accuracy be required, the particular rental 

 value obtainable for the land only, 2 after interest is charged 

 on the cost of establishing the crop, should be added to the 

 annual sporting value, and the sum of these capitalised at 

 25 to 30 years' purchase. By this means the value is made to 

 depend upon the species of the crop that can be grown and 

 its estimated rental value for land only. 



Therefore, taking the previous example, in which 



1 500 cub. ft., at 8d. = ,50 (present value of crop) 

 2200 cub. ft., at lod. = ,91-6 (future value of crop in 10 years), 

 and the increment in value is ^41-6 ; 



and supposing that the land, including the sporting value, be 

 worth 5 ; and that a capital of 4 will provide for the 

 annual outgoings over and above any sum received as a 

 sporting rent : 



The rate of compound interest yielded for the period 



of 10 years 



200 41-6 



A, 



10 50 + 5+4 + 91-6 + 5+4 



200 x 41-6 



10 ' 159-6 



41^- = 5-21 per cent. 

 79-8 5 



1 This assumes the capitalised sporting value to be (say) 2. and the 

 capitalised rental value for planting to be ^i to .5. 



2 Vide Chapter XI I. 



