Merchantable trees are those trees that are big enough and good enough to attract a buyer. Young trees too small to sell are called pre-merchantable. Larger cull trees are called non-merchantable.

Cost basis is the market value of the timber portion of the timberland asset at the time of acquisition. It represents the amount of capital expended in creating or acquiring the timber asset. Having an established cost basis may help offset capital gains when timber is sold. See also Timber Tax.

As used here, depletion is depreciation of the timber asset, or the periodic recovery of a portion of the cost of creating or acquiring the timber asset, usually through timber sales. A depletion schedule is useful in the accounting of large timber tracts. See also Timber Tax.

Stumpage rates are the per-unit prices
(in board feet, cords, or tons) offered for standing trees.

More information about growth-and-yield modeling can be found under Analysis and Management.

Many forestry terms predate the metric system. That is why foresters use the Roman numeral M rather than the Greek letter k to designate thousands. Hence, one thousand board feet is abbreviated 1 MBF.

IRR stands for internal rate of return. IRR is the discount rate that causes projected revenues to equal the cost of the project (net present value = 0). IRR represents the interest rate an investor may expect to earn on an investment. The same calculation is also known as ROR (rate of return), ROC (return on capital), and ROI (return on investment). See also Analysis.

In 1998, prices for rural, cutover timberland in Alabama ranged between $500 and $1000 per acre.

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Rotation age is the age of the stand at final harvest.

Second generation refers to the number of generations of trees that have been of systematically culled and selectively cross-bred in the seed orchard.

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Silviculture is applied forest ecology. David M. Smith once defined forestry as anything done in the woods, and silviculture as anything done to them.

NPV is the net present value of a finite series of costs and revenues at a chosen discount rate. The same calculation is also known as PNW (present net worth) and DCF (discounted cash flow).

BLV stands for "bare land value." BLV is the net present value of an infinite series of costs and revenues at a chosen discount rate. As the name implies, BLV represents the amount a buyer could afford to invest in a given tract of bare land and achieve the specified discount (or interest) rate growing trees on that land. The same calculation is also known as SEV (soil expectation value) and LEV (land expectation value).

Bailey, P.D., H.L. Haney, D.S. Callihan, and J.L. Greene. 1999. Income tax considerations for forest landowners in the south. Journal of Forestry 97(4):10-15.

Cost basis is the market value of the timber portion of the timberland asset at the time of acquisition. It represents the amount of capital expended in creating or acquiring the timber asset. Having an established cost basis for a recently acquired timber tract may help reduce capital gains when timber is sold. For further information on basis see: http://www.fnr.purdue.edu/ttax/faq/faq2.htm