NPV Calculation Following is a net present value calculation for a hypothetical timber management scenario. A weed control treatment is conducted in year 1. A precommercial thinning, yielding no revenue, takes place in year 15. A commercial thinning takes place during years 40 and 50 and the stand is clearcut at age 60.
All cash flows take place at the beginning of the year.
Discount all costs. Discount all revenues. Subtract discounted costs from discounted revenues.