return earned on investments measured in 

 current dollars (including inflation). The real 

 rate is expressed in constant dollars and does 

 not include inflation. 



ASSET VALUE RELATED 

 TO THE CURRENT 

 TIMBER-MANAGEMENT 

 POLICY STATEWIDE 



DNRC has adopted a Statewide sustained- 

 yield harvest volume estimate of 42.164 MMBF 

 per year using assumptions based on the 

 Omega Alternative from the Statewide Plan 

 (Montana DNRC, 1996). The asset value that 

 is related to timber harvesting from trust land 

 is, therefore, the value of an infinite series of 

 harvests totaling 42.164 MMBF per year. The 

 present value of an infinite series of annual 

 payments is equal to the armual payment 

 divided by the interest rate. The current real 



interest rate for DNRC is 4% (see Montana 

 DNRC, 1996, for details). If we assume an /■' 

 average gross stumpage value (gross income 

 to the trust does not include the forest im- 

 provement fee or administration costs) of $190 

 (average used in the State Plan, Montana -—4 

 DNRC, 1996) per MBF and no future changes 

 in cost and prices, the estimated present gross 

 asset value related to timber harvesting is 

 $200,279,000 (42,164 * 190/. 04). If we use an 

 average program ratio of total revenue /total 

 cost equaling 2.0, this yields a present net asset 

 value of $100,139,500 (42,164 * 95/. 04). XI 



The following table estimates the annual 

 average harvest volume in board feet per acre 

 for the State as a whole. This is based on the 

 sustained-yield-study estimate of harvest 

 volume and acres, the gross-revenue estimate 

 of $190 per MBF, and a net-revenue estimate of 

 $95 per MBF. The $95 per MBF assumes a 

 ratio of total revenue to total cost of 2.0. 



TABLE 111-17 - THE AVERAGE VALUE PER ACRE OF TIMBER HARVESTING, ESTIMATED 

 GROSS, AND ESTIMATED GROSS AND NET REVENUE STATEWIDE 



CURRENT ESTIMATED VALUE BASED ON CURRENT INVENTORY FOR THE BEAVER 

 LAKE PROJECT AREA 



The following table was estimated using the SLI database. 



TABLE III-18 - ESTIMATED TOTAL ACRES, SMZ ACRES, DMZ ACRES, AND NET ACRES FOR SLI 



Chapter III: Affected Environment 



-m-^: 



