INCOME-VALUE OF LAND 33 



years, where the expenses are $175 during the eighty years, and 

 where the. final crop is worth $400 and money is rated at 3%. That 

 the value of this acre may change if a different kind of timber is 

 raised or if the pine is cut at sixty years, or expenses are lower or 

 higher, or if a different rate of interest is set, is evident. It is clear 

 too, that if the man pays $23.40 per acre for this land and uses it 

 as outlined above, he makes three per cent on his investment and 

 no more. This Se then, is rather the maximum price which he can 

 actually pay. 



It is evident, also, that these same considerations hold in case 

 of a piece of farmland. The same acre of land produces a larger 

 income with sugar beets or potatoes than with wheat and more with 

 wheat than hay, so that the same acre has different income value in 

 different years owing to" change in crops, yield, expenses, etc. Yet 

 this income value is considered the safest measure of value and 

 forms the basis of all farm valuation and assessment. 



2. The usual case of Se. 



a. Premises : 



Area, 40 acres ; method, clear cut, and plant. 



Rotation r, 80 years ; interest rate p, 3%. 



Cost of planting c, $6 per acre. 



Yearly expenses, taxes and care, e, twenty-five cents per acre. 



Yield of timber eighty years old, or Yr, 30 M ft. at $10, $300 

 per acre. 



Thinning when stand is 20 years old. To,,, just pays expenses, 

 hence no income. 



Thinning when stand is 40 years old, T^^, yields 5 cords at $3 

 or $15 per acre. 



Thinning when stand is 60 years old, T^o, yields 10 cords at 

 $4.50 or $45 per acre. 



h. Gross income per acre at end of rotation: 



Final yield or cut 80 years old, Yr $300 



Thinning when 20 years old, T20 o 



Thinning when 40 years old, T40, 

 $IS, with interest for 80-40 years 



or IisCloj") SO.40 



Thinning when 60 years old, T60, 



$45 with interest for 80-60 years 



or $43(1-03=°) 81 



Total $431-40 



