HALE VALUE. 139 



By introducing the expectation value of the soil, the above 

 equation becomes : — 



rQ, = / ^;+ T„ X i-07y-"+- • .4- n X roy-^-e X rOj/ _^.^^A 



X (1-0;/ - l)+cX I'Oi/ - (r„X l-O;/-" + . . . + T„ X VOif-''). 

 which, after reduction, leads to — 



(3.) The Rate of Interest. — If the calculation is made with 

 the maximum expectation value of the soil and the receipts 

 and costs corresponding to it, then a higher rate of interest 

 yields a lower cost value, and rice rersd. 



If the above assumptions do not hold good, it depends on 

 the value of the soil and the amounts of receipts and costs, 

 which are introduced into the calculation, whether a higher 

 rate of interest gives a greater or smaller cost value of the 

 growing stock. It would lead too far, to follow up in this place 

 this somewhat complicated subject. 



3. Sale Value, or Utilisation Value, of the Groicing Stock 



of a Siiu/le ]J'ood. 

 By the sale value of the growing stock of a wood is under- 

 stood that price, which it would realise, if offered for sale in the 

 open market. 



The growing stock may be sold und^r one of two 

 conditions : — 



(a.) The wood is allowed to grow on for a number of years. 

 In this case, the purchaser would have to rent the soil 

 for a number of years, and to meet certain other 

 expenses. Hence, the sale value should be equal to 

 the expectation value. 

 Ih.) The wood is to be cut down at once. In this case the 

 sale value would be the price, which the cut material 

 realises in the open market. It is ascertained by 

 determining the volume of the growing stock and 

 multiplying it by the net mean rate per unit of 

 measurement. 



