Carignan Forestry Consultants

· Is my plantation producing an acceptable rate of return, or would my money be better invested elsewhere?

· If I buy this tract of cutover timberland, can I make 8% on my money after inflation growing pine trees?

· My planted pines seem to have a lot of hardwood trees mixed in with them. If I invest another $65 per acre for a release treatment, what will be my marginal rate of return?

· At what age should I thin and harvest my planted pines to maximize the return on my investment? In the thinning, should I remove every third row? Every fifth row?

· The county agent said I should plant my cutover land by hand. My neighbor says he can do it with a V-blade tractor. Which is best?

· I've qualified for $30 per acre in cost-share assistance, but I will have to plant a minimum of 600 trees per acre. Is this a good deal?

· I've been offered $1,200 per acre for my land, which contains 3-year-old planted pines. Should I accept?

· How many trees per acre should I plant?

Many of these questions can be answered - in quantitative, unambiguous terms - by combining old-fashioned cash flow analysis with a new-fangled tool; a computer model which simulates tree growth under different conditions. CFC uses a model based on one first developed at Virginia Tech with special modifications to allow the simulation of the most modern silvicultural treatments. For those questions that cannot be directly answered, growth modeling and financial analysis provide a solid foundation on which decisions can be based.

Modeling can be used to examine the effects of different treatments upon an existing plantation, or to compare the volume growth of different establishment methods for a plantation being contemplated. The timber volumes predicted by modeling are used to construct cash flows for comparing alternatives.

Depending on the needs of our clients, the results of cash flow analysis can be expressed as net present value (NPV), bare land value (BLV), or internal rate of return (IRR). For example, NPV can be used to establish a "market value" for pre-merchantable planted pines, BLV can be used to calculate a maximum purchase price for cutover land based on soil productivity, and IRR can be used for comparing alternative investments.

Timber Tax