RANKING STANDS FOR TREATMENT 



The calculation of rate of return is quite 

 complicated when a series of costs as well as 

 a series of returns are involved. Computer pro- 

 grams have been prepared by both Hall and 

 Row^ for making present worth and interest 

 rate computations. These programs have been 

 adapted by the Intermountain Station for use 

 on the Forest Service's Northern and Inter- 

 mountain Regions' computers to handle com- 

 mon evaluation problems of timber growing. 

 Basic adaptations of both Hall's and Row's 

 programs are described by Green and Alley for 

 use in ranking species alternatives (Research 

 Paper INT-42 in this series). The discussion 

 here describes another version of the Clark 

 Row program usable in ranking opportunities 

 in existing stands and in evaluating timber 

 stand improvement programs. Use of the pro- 

 gram is illustrated in brief in the pages that 

 follow. Details of the program are presented 

 in the Appendix. 



^Hall, Otis. Evaluating complex investments in 

 forestry and other long-term enterprises using a digital 

 computer. Purdue Univ. Res. Bull. 752, 11 pp. 1962. 

 Row, Clark. Detennining forest investment rates of 

 return by electronic computer, U.S. Forest Serv. Res. 

 Pap. SO-6, 13 pp. 1963. 



RANKING STANDS FOR REPLACEMENT 



The program given here is identified as 

 Intermountain Station Investment Analysis 

 Program No. 6c (The program listing is given 

 in the Appendix,) Among other things, this 

 program will compute discounted net worth'^ 

 of future crops and discounted net worth of 

 the present and future crops combined. 



There are two common uses for this feature 

 of the program. First of all, the program can 

 be used to determine, from a financial stand- 

 point, which stands should be considered for 

 immediate cutting. To illustrate, if present 

 net worth for a stand would be increased 

 significantly if the stand were held for another 

 10-year planning period, considering both the 

 value changes in the present stand and the 

 future growing opportunity, the manager 

 would not want to program it for cutting now. 

 From an economic point of view a manager 

 might want to hold the stand described below: 



''Discounted net worth is the computed present net 

 value of the area, assuming a specified rate of return. 



Present stand and conversion opportunity 



Estimated merchantable volume ( 1 00 

 cubic feet per acre) 



Quahty index 

 Future timber growing opportunity 



Site preparation year after cutting 

 (cost, dollars per acre) 



Regeneration (cost, dollars per acre) 



Precommercial thinning 21 years after 

 site preparation (cost, dollars per acre) 



Intermediate cut 30 years after 

 tliinning (100 cubic feet per acre) 



Alternative 1 

 (cut now) 



70 

 .90 



5.00 

 .00 



22.00 



25 



Alternative 2 

 (cut in 10 years) 



80 



1.10 



5.00 

 .00 



22.00 



25 



14 



