THE VALUATION OF FORESTS 97 



bare soil, differs in the period m and gives, not the value of soil, 

 but of the soil and timber remaining after the cut. It is the 

 value of the real estate or forest. 



The term F v is thus used to indicate the value of the forest 

 just following a cut. 



For any year previous to a cut, the value of the property may 

 now be found by discounting the net value of this yield to the 

 present, and adding the discounted value of F v . 



This gives 



i.op m ~ a i.op m 



The value of a forest producing a regular annual income is 



found by capitalizing this net income, using Formula XII, -- . 



o.op 



The annual income will be Y + T p + T q + T r . 



Annual expenses are C + n X e, since e is the annual expense 

 for but one area or age class and there are n age classes in the 

 forest. 



Other expenses, as C d , C e and C f , also occur annually. 



p _ Y + T p + T Q + T r - (C + C d + C e + C f + n X e) , p , 

 v o.op 



The net income, which is thus capitalized to obtain value, is 

 termed the forest rent ( 162). 



118. Value of Many-aged Forests Producing Irregular In- 

 come. Should the value of irregular many-aged forests be 

 sought, the period must first be determined, which is required 

 by the average trees to become merchantable. The stand must 

 then be roughly grouped into its age classes, and the approxi- 

 mate per cent of total area agreed upon which each age class 

 occupies. Each of these yields must then be discounted to the 

 present, with a value determined by its area. To get the net 

 value of each crop, the future expenses must be pro-rated ac- 

 cording to the same distribution of area. Finally, the total value 



