92 FOREST VALUATION 



The sum of future values (Q 4 ) is 

 T p 



i.op n i 



These expressions are equally applicable to costs occurring 

 before or after the year a. The present value, in year a, of an 

 even-aged forest or stand, is summed up as 



Y (i.op a ) + T p (i.op*- p ) + T q (i.op a -) 

 + T r (i.op- + - r ) - C (i.o^) - C d (i. 



i.op n i 

 This formula may be expressed in another form. 



+ i.n + j,r ^ ~'. 



- E. 



_ ___ 



i.op p i.op q i.op r i.o/> d i. op* i.op'J ' * _ E 



i.op n -i 



(Di) 



The chronological relations of these items are set forth in 

 Diagram II. The present year is the basis of valuation. Past 

 occurrences are ignored. But in the terminology, the numerical 

 value of a is reckoned from the past year o, or date of origin 

 of the crop, which is also the basis for the other dates. 



The year 20 is just n years in the future. The Formula DI 

 expresses the value of the items computed at compound interest 

 to the year 20., when the balance is struck which gives net 

 value. This net income recurs at intervals of n years from 



date, and its present value is , hence the above result. 

 i.op n i 



116. Value of Forest Soil. The value given in Formula C 

 was for a forest just previous to removal of the final cut. This 

 value steadily diminishes as the date of this cut is assumed to 

 be further into the future until the lowest ebb is reached, just 

 before the discount period overlaps the date of the previous cut. 

 A similar fluctuation in value occurs in the case of an account 



