EXPECTATION VALUE OF STAND 63 



7. In the above case the cost value Sc of the land was used. 

 In most cases it is but natural that this should be so. But where 

 the cost value is practically zero, quite common where the land and 

 timber were bought together and only the merchantable timber con- 

 sidered in the price, the cost value is misleading, the land may read- 

 ily be worth five or ten dollars an acre and so have an accepted sale 

 value. 



In such cases the sale value, Ss, is used. Occasionally the land 

 has neither cost nor sale value which could be agreed upon, for in- 

 stance, state and national lands, remote mountain or non-agricultural 

 land. Here the temptation is to ignore the value of the land entirely. 

 This is wrong since any land which can and does, or actually has 

 produced a crop of timber having value, has value itself. Incon- 

 sistency here is liable to lead to trouble for sooner or later the value 

 of these very lands may come in question. In such cases, the Se 

 properly based and discounted should be substituted as S. ~ / a^l 



To employ Se without deductions is hardly advisable since Se 

 is rather the maximum value of the land for the particular purpose 

 and to employ a maximum price in these calculations is hardly safe 

 or satisfactory. 



c. Expectation value of growing stock. 



Ordinary case: Spruce, clear cut, and plant; rotation, ninety 

 years; area, eighty acres; age of stand, forty-five years, p, two per 

 cent. 



1. Premises per acre: 



Land value Sc $20 



Yearly current expense e 0.50 



Final yield, Yr, stumpage value, 40 M. feet at $10 or. ... 400 



Thinning at 50 years, stumpage 30 



Thinning at 70 years, stumpage , 60 



2. Gross income per acre at end of rotation : 



Final yield '. $400 



Thinning at 50 and interest for 40 years 66 



Thinning at 70 and interest for 20 years 89 



Total $555 



3. Expenses per acre to end of rotation : 



Rent of land and current expenses treated as in case of cost 

 value, 



(SC + E) (l.0p r - m -l)=r- (20 + 25) (I.02 45 1)....$6 4 . 



