COST VALUE. 147 



The value of the forest is then represented l)y the formula — 

 ,. .V ^ r,- + T,, X l-O^/ -" -\- . . .-E (l-Ojj'-'-'" - 1) + ^' 



If the present growing stock is abnormal, a further moditi- 

 cation is required, by substituting the abnormal for the normal 

 returns. 



'2. Cost Value of a Forest. 



a. The (Just Value of a Forest is equal to the Cos/ Value of the 

 .Soil plus that of the Crowiiuj Stock 



(1.) For any soil value — 



'-F = s+{S+E) (i-oy- i)+c X i-Oiy"-[r,x i-Oiy''-"+ • • •] 



"Pe = (S + E+ c) l-Op« — [T^ X l-Op-"^^ + . . . + E] . 



(2.) By introducing the expectation value of the soil, the 

 above becomes, for normal woods — 



-F, = (^;+:/:,Xl-Op"+...-cXl-0;,_ £ _^ £ _j. \ i.Q „ 

 V I'O;?' — 1 / 



- [r.xroi/"- + ... + £] 



1-0// 



«^" --£. 



This, it will be observed, is equal to the expectation value 

 of the forest. 



h. The Cost Value ran he cakulated direct out of the Expenses 

 incurred. 



The method is similar to that followed in calculating the 

 cost value of the growing stock, but the value of the soil is 

 added instead of the rental only ; hence — 



"'F,= Sxl-02J"^-\-E{l-0p--l)+c X l'Op"'-{T„ X l'Op"'-"+ . . .) 

 = {S + E + a) 1-Op"^ - [T„, X I'Qp'"-" + . . . + Al 



as before. 



l2 



