COST VALUE AND SALE VALUE. 131 



(2.) The sum expended in rendering it fit for cultivation, 

 such as drainage or irrigation, levelling, fixation, etc. 



(3.) The interest accumulated on the outlay mentioned 

 under (1.) and (2.) up to the date, when the first forest crop is 

 started. 



Example. — An acre of land has been purchased for £10 ; 

 a sum of £5 has been expended at once in breaking through 

 an impermeable substratum in strips 6 feet apart ; a further 

 sum of £2 has been spent after the lapse of 3 years in 

 breaking up the intermediate strips ; the land was allowed to 

 lie fallow for another 2 years. The cost value of the land 

 at the end of 5 years, when it is planted, amounts, calculating 

 with 2i per cent., to 



S,. =z (10 + 5) X 1-025^ + 2 X 1-025- = £19 Is. 5(7. 



The cost value of the land may be accepted as the true 

 value : — 



(1.) If the expectation value of the soil cannot be ascertained 



with any degree of accuracy: 

 (2.) If the owner agrees to let the land go at the price, which 

 represents his own outlay on it 

 The cost value of the soil may be equal to, smaller, or larger 

 than the expectation value. 



Section III. — The Sale Value of Forest Soil. 



By the sale, or market, value of forest soil is understood 

 the value, which it realises in the open market. It represents 

 the true economic value only, if it agrees with the expectation 

 value. 



In most localities a sale price has established itself, but this 

 represents in the majority of cases the value, which the land 

 has for other purposes, such as agriculture. It may differ 

 considerably from the value, which the land has, if used for 

 the production of forest crops, the sale value being generally 

 higher than the forest value in the case of good lands and 

 lower in the case of inferior lands, because the former yield 



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