FOREST STATICS BALANCE SHEET PROFITS 107 



The expression ^ gives the present equivalent of T p in the 



year a whether a > p or the reverse. Therefore, 



T p T Q T r 



i .op n ~ a i .op p ~ a i .op*'* i .of 



- (C + S c + E) i.op a - C d 



c p 



i .o p ~ a 



f~> / Aa e\ /"" f T r\faaf\ (~[ ^ 



125. Profits from Continuous Forest Production. If in- 

 stead of abandoning the business, forest production is to be 

 continued, the sale value S t credited for land does not express 

 the true conditions. The value S,, representing the expectation 

 value of the soil or the value of all future crops, must be sub- 

 stituted for S,. 



Formula H then becomes 



P = Y + S v + E - (C + S c + E) i.op. (L) 



The net profits from future crops, expressed as 



Y -C 

 i. op* - i 



may be substituted for the expression S v in the formula, which 

 does not alter the result. Both the net profit on the present 

 crop, and on the future crops, S v , should include all items of 

 cost and income which appear in Formula HI, but the repetition 

 of these terms in Formula L has been omitted. 



126. Anticipation of Continuous Profits. To anticipate the 

 total net profit, for the year a, including net income from all 

 future crops, the value S,, once determined, is substituted for 

 S c as an asset in Formula KI which then reads 



i.op. 



This formula is modified by the same additions for extra items 

 of cost or income, as Formula K 2 . But Formula KI gives the 

 profit on the present stand of timber, exclusive of future crops 

 or of profit on the sale of the land, while LI includes these 



