AN ADIRONDACK PROBLEM. 



PREMISES : A tract of land in the Adirondacks, acquired in 

 the year 1876 at $5 per acre, was cut over in i883, yielding then, 

 per acre, 1800 feet b. m. White pine, worth $3 per thousand feet 

 b. m., and 2600 feet b. m. Spruce, worth $1 per thousand feet. 



In the year 1896, there were cut per acre another 6350 feet b. ra. 

 of spruce, worth $1.50 per thousand feet b. m. 



The taxes on the forest were Sc per acre per annum ; the 

 expense of administration and protection 2c per acre per annum. 

 Figure at 6 per cent. 



QUESTION : At what cost were those last 6550 feet b. m. 

 produced ? 



POINTS : 



I. The price paid for the land, in 1876, was $5 per acre, which 

 accrued, at compound interest, and up to the year 1896, to $5.00x1. 06^° 



a. The running expenses, during the period 1876 to 1896, were 

 7 cents per acre per annum, and sum up to the amount of 

 0.07 (i.o6^° — I) 

 0.06 



3. The yield made in 1888 was $3.00 x 1.8 -\- $1.00 x 2.6==$8.oo 



Discounted forward to the year of calculation, 1896, this yield, 



(which is of course to be subtracted from the various outlays) 



amounts to $8.00 x 1.06^. 



EQUATION : ^ ^,„ 0.07 (i.o&o - D „ 

 ^ X = 5 X i.off!" -L — 006 ^ — 8x1.068 



RESULT: The cost of producing those 6550 feet was $5.80. 

 As the value of the 6550 feet is $9.82, the owner has gained, aside 

 from making 6 per cent, interest on the investment and aside from 

 having the value of the culled forest for an additional asset, about 

 $4.00 per acre. 



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