These prices are relatively high compared to historical values. Since the prices already tend to be high we use the current prices in this analysis, and do not assume future price increases. A slash pine stand is grown for 20 years and then clear-cut. A time line for this example is shown below. In this example a planted slash pine stand is thinned to 60 square feet of basal area per acre at 15 years and clear-cut at 25 years.
All investments have a time dimension that can be depicted with a time line.
The following is the time line for this example. Calculate the PV of revenues. As the interest rate increases, the NPV and EAE will decrease. Interpreting the results Table 4 shows that the results from the timber production examples indicate its net returns on an annual basis are very competitive to net returns from crop production. Current market conditions can greatly affect returns.