122 



CHAPTER II. 



VALUATION OF FOREST SOIL. 



The soil can be utilised in U\o waj-s : — 



Either by being used direct, as for mining, quarrying, con- 

 struction of dwellings, etc. ; 



Or by letting it i^roduce other goods, as field or forest crops. 



In each of these cases the soil may have a different value. 

 Forest valuation ascertains the value of the soil under the 

 supjDosition, thatit is used for the production of forest crops; 

 for this purpose it determines the expectation, cost and sale 

 value. 



Section L — The Expectation Value of Fokest Soil. 

 1. Method of Calculation. 



In conformity with the definition given at page 112, by 

 the expectation value of forest soil is understood the sum of 

 the present values of all returns expected from the soil in the 

 course of time, less the present value of all expenses, which 

 must be incurred to obtain those returns. 



a. Frosent Value of Returns. 

 (1.) Final Yields. — Let the rotation contain r years, and let 

 the value of each final yield, less cost of harvesting, = ¥,., to 

 be realised every r years, then the present value of all final 

 yields for ever amounts, according to formula VIII. (page 117), 

 to:— 



r.. 



Present value of all final yields 



1-0//— 1' 



(2.) Intermediate Cuttings, or Tliinninijs. — Let Ta, T,„ T^ 

 . . 1\, represent the value of thinnings, less cost of 



