76 FOREST VALUATION 



a. Interest made by the growth of a stand during a short 

 period or part of a rotation: If the cost value of the land is $10 

 per acre and the cost value of the stand, now 30 years old, is $80, 

 then the amount invested in this enterprise is $90 per acre. Evi- 

 dently the only increase in value of this piece of forest is due to the 

 growth of the timber. If the growth in volume, quality and mar- 

 ket price amounts to $20 in 5 years then this $20 represents the in- 

 terest for 5 years on the $90 invested, and approximately the rate of 



20 X 



interest is: or 4.4%. While this calculation is a fair ap- 

 5X90 



proximation it requires modification for larger enterprises, and bet- 

 ter analysis. The following illustrates the usual modification. 



Area, 40 acres ; stand, even aged 50 years old at beginning of 

 period, and 55 at end; p, 2% ; land, $10 per acre; yearly expenses, 



e 



e, $i per acre; therfore - or E is $50; the value of the stand at 



.02 



Cn 

 50 years is $250 and at 55 is $300. The reasoning then is : i.op n = . 



Co 



The initial capital, Co, is made up of stand at 50 years, land, and E, 

 the final capital, Cn, of stand at 55, plus land and E, and we may 

 set: 



Y 53 4- S -f E $300 4-io 4- 50 



i. op = ' = ^ - - f-*- 1.16 and hence p = 3%. 



Y 4- S -j- E $250 -f 10 4- 50 



This per cent made by the current growth of the stand may be term- 

 ed "forest per cent," or P f , and is the "Weiser" per cent of the Ger- 

 man authors. 



The formula as written bv Endres is : 



w 



AH-B4-V 

 or in our terms, 



/ lYx +n 4- S -I- E 



" = ""(>/ Y. + SI-E - 



which readily changes into the above simple form. 



This form of analysis was used by Pressler and Heyer over 

 fifty years ago. It is useful in determinig whether a given stand 

 should be cut or left standing, the usual assumption is that if the 



