138 VALUATION OF THE GROWING STOCK. 



The general formula for the cost value is, therefore — 



"G-^ = (S + E) (1-Op™ — 1) + c X l-Op" — (T^ X l-Op™-^ 

 + Tb X 1-Op^-' + . . . + T, X 1-Op™-'). 



Here "'G<. still includes the thinning of the j^ear m. If the 

 calculation is made for what remains as final yield to go on 

 with, then the tliinning in the year m (= T,,^ ) must also be 

 deducted. 



Example. — Taking the same data as before, the cost value 

 comes to — • 



45(7, = (404 + 120) (l-0-25^-^- 1) - (5 X l-025i-^+ 44 X l-025'^). 

 ^^Gc = 1,193 shillings, as in the case of the expectation value. 



h. Notes on Ihf Cost Vatve. 



The cost value of the growing stock depends on — 



(1.) The ahsohite anwKnt of tJie reeeijits and expenses up to the 

 year m. 



(2.) The Afie o/ the Wood. — The value rises with the age, 

 but temporary exceptions occur, as immediately after 

 a thinning the cost value may be smaller than imme- 

 diately before it. 



At the commencement of the rotation, the cost value is equal 

 to the cost of formation. 



At the end of the rotation, the cost value is equal to the 

 value of the final yield, provided that — 



(a.) the calculation has been made with the expectation 

 value of the soil (404 shillings in the above case) ; 



(h.) the receipts and expenses were of the normal amounts, 



and 

 (c.) the wood is fully slocked, or normal, at the end of the 

 rotation. 



Proof.— Let ni = r, then, 



rQ, = (s + F.) vop' - ] ) + c X 1-op - en X i-o;/-" + . . . 

 + 7; X 1-Op' ")• 



