3. Two illustrative examples

alt


Example 1

A forest owner anticipates earning the following net harvest revenue from the forest that she planted in 2006. What is the present value (sum) of the revenues at 4 % discount rate?1

 

Year
Revenue (€/ha) Discounted (€/ha)
2036
800
247
2051
3000
514
2066
13000
1236
Sum

1996 (present value, 4%)
 

 

 

Example 2

How many euros are required from a final felling at year 60 to earn a 3 % average annual rate of return for 800-euros planting investment at year 0?2
 
 

 

1. The answer to Example #1 is 1,996 €/ha.

2. The answer to Example #2 is 4,713 euros after using the compounding equation.

Leave a Reply