Costs & Returns for Management Activities on a Hypothetical 100 Acre Woodlot
|
Service |
Cost/Year |
|
Benefit |
Return/Year |
Ch 61 Management Plan 10 Yrs @ $600+$6/Ac Land Tax @ 5% Ch 59 Rate 8% Stumpage Tax for $50/Ac/Yr
|
|
|
Eliminate Ch 59 Tax Ch 59 Tax @ $700/Ac, Tax Rate of $18/$1000
|
|
$120 |
|
$63 |
|
$400 |
$1,260 |
|
|
|
|
Boundary Blazing & Painting
10 Yrs @ $60/1000 LF |
|
Lower Risk of Timber Trespass Identify Property |
|
$50 |
$50 |
|
|
|
|
Mark & Tally Timber, Administer Sale Every 10 Yrs 3 Mbf/Ac @ $20/Mbf
|
|
Increased Value from Competitive Bidding*
|
|
|
|
$600 |
$600 |
|
|
|
|
Commercially Thin & Weed Residual Stand with Above Timber Sale
2 Cd/Ac @ $5/Cd
|
|
Increased Rate of Value Growth on Residual Stand from Harvest & Thinning
40% Above Base $35/Ac/Yr
|
|
|
|
|
|
$100 |
$1,400 |
|
|
|
|
Recreational Development Plan 10 Yr Cost = $1000
|
|
Quicker Sale of Property Interest for .5 Yr @ 8% & $700 per Ac Reduced to Annual Cost/10 Yrs
|
|
|
|
|
|
$100 |
$280 |
|
|
|
|
Inventory Data Processing, Simulations & Analysis 10 Yrs @ $200+$1/Ac
|
|
Quicker Sale of Property
Internest for .5 Yr @ 8% & $700 per Ac Reduced to Annual Cost/15 Yrs
|
|
|
|
|
|
$20 |
$280 |
|
|
|
|
TOTALS |
$1,453 |
|
$3,870 |
|
|
|
|
Discounted 10 Yr Costs (@ 8%) |
$9,751 |
Compounded 10 Yr Returns (@8%) |
$56,065 |
|
|
|
|
Rate of Return on Costs |
19.1% |
|
|
|
|
|
|
NOTE: These costs and returns are those attributable to management. Returns are over and above
those from unmanaged land, which, as indicated above, would be about $35 per acre per year or $3,500 per year for this hypothetical 100 acre property. Therefore the total annual return
would be $7,730. *This is a minimum
amount for increased value from competitive bidding. Studies have shown that after-cost returns from bid sales are the in range of 20-40% above non-bid sales. See Free Silviculture page.
Karl Davies August, 1998 |