212 PRINCIPLES OF AMERICAN FORESTRY. 



27. A YELLOW POPLAR PROBLEM. 



Premises: Pisgah forest contains 40,000 acres, stocked 

 with 60,000,000 feet, board measure, yellow Poplar of 

 superior quality, worth now $3..50 per thousand feet, 

 board measure. The owner expects that the prices of 

 Yellow Poplar stumpage will double \vithin the next 15 

 years (increase of 5 per cent, per annum), and that then 

 small logs and defective logs will have a value as well, 

 so that 70,000,000 feet, board measure, will be available 

 in the year 1915. 



The taxes and the general expenses take 6 cents per 

 acre per annum. 



The value of the soil, after the timber is cut, can be 

 assumed to be $2 per acre. 



The owner figures at 6 per cent, interest. 



Question: What is the profit from the investment, if 

 any, at the end of the next fifteen years, aside from the 

 interest of 6 per cent.? 



Points: 1. The present value of the investment is 

 $60,000X3.50 for the trees and $40,000X2.00 for the soil. 



2. The value of the forest in 1915 is $70,000X7.00 for 

 the trees and $40,000X2.00 for the soil. 



3. The running expenses from 1900 to 1915 are, per 

 annum, $0.06X40,000. They accumulate, up to 1915, 

 to the sum 



0.06X40,000(1.06^°-1) 

 0.06 



Equation: a; = 70,000x7.00+40,000X2.00-1.06" 



(60,000X3.50 + 40.000X2.00) QQ^X^O'QQQj^"^"-^) 



0.06 



Result: The owner M-ill find himself $182,000 short. 

 He will lack a good deal of making 6 per cent, on his 



