Economic Feasibility Analyses 



3535 



Figure 28-21. — Materials-balance (daily basis, single-shift) for manufacture of pallet 

 stock and 7- by 9-inch, two-piece, dowel-laminated crossties. CF = cubic feet. 



Annual purchased log volume (6- to 24-inch diameter at top end) is 24 million 

 board feet Doyle scale (6,154,500 cubic feet); annual production is as follows 

 (single-shift basis): 



Product Annual production 



Mbf, lumber scale 



Two-piece, dowel-laminated 7- by 9-inch crossties 8,032 



Pallet lumber 9,650 



Additionally, annual sales of veneer logs and random length sawlogs total 9.2 million board feet 

 Doyle scale. 



Annual production of by-products (green- weight basis) is comprised of 68,232 

 tons of pulp chips and 16,140 tons of hogfuel (mostly sawdust and bark). The 

 foregoing data and other key statistics following are based on a single-shift 

 operation 250 days/year. 



Capital investment (including working capital) $4,179,574 



Operating cost, annual 4,055,681 



Sales, annual 5,079,886 



Gross profit, annual (before income tax) 1 ,024,205 



Return on sales 20 percent 



Return on investment after income taxes 15.9 percent 



Employees, number 14 



Energy requirement, annual electrical 3,221 ,400 kWh 



A two-shift per day operation, which doubles the output of the mill is estimated 

 to produce a 25 percent return on sales and a 38.3 percent return on investment 

 after taxes. 



The projected materials balance for the operation (single-shift basis) is shown 

 in figure 28-21. Log purchase price is estimated at $1 10/Mbf, Doyle log scale. 

 Product sales prices, f.o.b. mill, are estimated as follows: 



