Density management activities as investments Stands in BC exhibit great variability in growing conditions and capacity for timber production. This results in a wide range of economic conditions for making silviculture investment decisions. Assessing the economics of a proposed silviculture activity requires information about benefits and costs of the activity from the time of stand establishment to the time of expected harvest. Costs and benefits may be actual if they have occurred, or expected if they are anticipated in the future. Expected costs or benefits are estimates, and may differ from actual costs and benefits when they occur.
Estimation therefore involves accounting for the uncertainty surrounding their actual values.
Information about the timing of stand activities is also required, since various costs and benefits usually occur during different time periods over the life of a stand. Regeneration costs such as site preparation and planting are incurred within the first few years, whereas density management costs are incurred between stand age 10 and 30. In order to make economic comparisons between different stands or different treatments, however, NPV must be calculated over the same time period. That is, for each present value, the starting point must be the same for each stand or treatment, and the end point must be the same expected rotation length. Since the timing of different stand treatments and the rotation lengths of different stands are rarely the same, it is often impossible to compare treatments and stands in this manner.