176 FOREST VALUATION 



Then z ^d.or)-^ (P3) 



or - Z = A(o.op)+~^ (P 4 ) 



a 



The first formula utilizes the wrecking value, while the 

 second introduces total depreciation, and is somewhat simpler. 

 The factor d is easily computed from Table VI, or, for values of 

 p not given, by logarithms, in which the logarithm of i.op is 

 multiplied by n to obtain the logarithm of i.op n .% 



* "Modern Accounting," by Henry Rand Hatfield, page 132. 



\ (A i.op X) i.op X] i.op ... to w terms = W. 

 A (i.op n ) -X(i + i.op + i.op 2 . . . Lop"- 1 ) = W. 



A (i.op n ) - X T - pn ~ T = W (by Formula Qj). 

 i.op i 



x _A(i.op n )-W 

 i.op n i 



op 

 A (i.op n ) - W 



d 



t Proposed by W. B. Hunter, formerly special examiner in U. S. Bureau of 

 Corporations. 



Let X = A (o.op) + e. ' 



Then, in second year, 



(A - o.op e) o.op = interest on capital. 

 e (o.op} = increase in depreciation. 

 e + e (o.op) = e(i.op) = depreciation. 

 In third year, 



(A o.op e ' i.op) o.op = interest. 



e (i.op) X o.op = increase in depreciation. 



e (i.op) e (i.op) X o.op = e (i.op 2 ), depreciation. 



D = e + e (i.op) + e (i.op*) . . . 



A (o.op) +. 



i The objections urged against this method are: first, that it allows interest on 

 invested capital as a cost (Hatfield); second, that a plant depreciates more rap- 

 idly during the first few years than thereafter, and loss during that time would 



