Analyzing Uncertain Timber Investments


Book Description

S2Presented here is a method of analysis that makes use of multiple estimates of project profitability stemming from different assumptions about the true values of uncertain factors like yields and prices. The purpose of the analysis is to screen competing projects to eliminate those that can be proved to be unprofitable, or surely less profitable than some other, regardless of the assumptions made about the values of uncertain factors.S3.






















Ranking Independent Timber Investments by Alternative Investment Criteria


Book Description

A sample of 231 independent timber investments were ranked by internal rate of return, present net worth per acre and the benefit cost ratio--the last two discounted by 3, 6.4. 7.5. and 10 percent--to determine if the different criteria had a practical influence on timber investment ranking. The samples in this study were drawn from a group of timber investments partially financed by Forestry Incentives Program costshare funds. The investment rankings were quite similar among the three criteria. Under constrained investment budgets, the benefit/cost criteria produced the investment selection with the greatest cumulative present net worth. Under less severe budget constraints, all three criteria produced investment selections with essentially the same cumulative present net worth.







Improvement in Butt-log Grade with Increase in Tree Size, for Six Hardwood Species


Book Description

S2Work carried out by the Northeastern Forest Experiment Station in West Virginia in the past 12 years provides useful information about the relationships between tree d.b.h. and butt-log grade. The upper logs are not included in the relationships. Being smaller and containing more knots, these upper logs are generally of lower grade than the butt logs. Thus the average grade of all material in the sawlog portion of the tree is generally lower than the average grade of the butt log. In the West Virginia data, species differences in d.b.h.-grade relationship are readily apparent. This inherent tendency for species to have different proportions of the various grades in logs of the same size is a familiar phenomenon to grade-conscious foresters who work with hardwoods. The results in this paper provide a quantitative evaluation of this tendency for six of the local species.S3.