Financial and Economic Evaluation Guidelines for International Forestry Projects

Cubbage, Frederick W.; Davis, Richard; Frey, Gregory E.; Behr, Diji Chandrasekharan; Sills, Erin O.

doi:10.1007/978-3-642-41554-8_68-2

Cited by 11 publications

(15 citation statements)

References 9 publications

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“…The Net Present Value (NPV) based on a 30-year projected rotation and 8% interest rate was calculated to analyze the financial performance of the management of the forest following the methodology in Cubbage et al (2007Cubbage et al ( , 2013a and adapted for specific management practices for natural forests in Mexico.…”

Section: Figurementioning

confidence: 99%

Community Forestry Enterprises in Mexico: Sustainability and Competitiveness

Cubbage

Davis

Paredes

et al. 2015

Journal of Sustainable Forestry

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Section: Figurementioning

confidence: 99%

Community Forestry Enterprises in Mexico: Sustainability and Competitiveness

Cubbage

Davis

Paredes

et al. 2015

Journal of Sustainable Forestry

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“…NPV is used as one of the primary indicators for project evaluation (Keča et al 2012;Rocha 1973;Tee et al 2014). It is generally recommended as one preferred criterion in most forest economics textbooks (Klemperer 1996;Wagner 2012) and particularly useful with relatively shortterm forestry investments, such as fast-grown species (Cubbage et al 2013).…”

Section: Capital Budgeting Analysismentioning

confidence: 99%

“…Land Expectation Value (LEV) is the extension of NPV into perpetuity for long-lived forestry investments of unequal time lengths (Eq. 2) (Cubbage et al 2013). It was proposed by Faustmann in 1849 and is still quite widely adopted (Tee et al 2014).…”

Section: Capital Budgeting Analysismentioning

confidence: 99%

“…Often owners do not know their discount rate, so IRR provides a means of comparing investments intuitively with the implied cost of capital. IRR avoids problems of project scale or length in making comparisons (Cubbage et al 2013). IRR often is used as a proxy for annual returns in the forest finance literature, making it comparable to other asset class analyses.…”

Section: Capital Budgeting Analysismentioning

confidence: 99%

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An analysis of potential investment returns of planted forests in South China

Zhang

Yin

et al. 2019

New Forests

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Financial returns of forest plantations are an important concern around the world. In this research, we focused on South China's timber investments, collected data from the Pingxiang, Guangxi Province, China, which is the demonstration zone of Fast-growing and High-yielding Timber Plantation Base Construction Program and National Timber Strategic Storage and Production Bases Construction Program, and used capital budgeting analysis method and sensitivity analysis to compare different scenarios of planted forest management. The results showed that excluding land costs, (1) the financial returns of Eucalyptus forest managed by small business were excellent, having an IRR of 28% per year and a LEV of $7555 per ha, but it had a high risk with fluctuations of cost, timber price and timber yield; (2) the results for the Experimental Center of Tropical Forests indicate that the Eucalyptus forest and Castanopsis hystrix forest returns were greater than those for Cunninghamia lanceolata forest and Pinus massoniana forest, with having IRRs of 24%, 21%, 13% and 10% per year respectively. The mixed planted forest of Castanopsis hystrix × Eucalyptus and Castanopsis hystrix × Pinus massoniana had the features of high profits and low risks; (3) the forest farmers had lower levels of returns for Eucalyptus forest management in South China, but were still in the middle rank of global comparisons. This study gave a view of China's timber investment and provided more options of improving the economic returns of planted forest management to both small businesses and forest farmers in South China.

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“…However, because establishment and management costs occur many months or even years before harvest, analysis should consider the opportunity cost of time by discounting future values relative to present ones. The quasi-rent, or residual value, over a finite period T, considering the opportunity cost of time, is given by net present value (NPV), which can be converted to the soil expectation value (SEV) for an infinite time horizon or the equivalent annual income (EAI) (Alexander et al 2002;Cubbage et al 2015):…”

Section: Net Present Valuementioning

confidence: 99%

Estimating the value of forests for provisioning non-timber forest products to market: concepts, approaches, and case studies

Frey¹,

Chamberlain²,

Schmidt³

2019

Agric. Resour. Econom. Rev.

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We discuss the process of estimating the ecosystem service value (ESV) for provisioning of non-timber forest products (NTFPs) to market, with a focus on the United States. NTFPs are harvested throughout the U.S. for numerous purposes, and those sold in market contribute significantly to household and local economies. While estimates of ESV can aid decision-making related to conservation and management, NTFPs have been generally neglected. We discuss challenges and approaches for prioritizing valuation, quantifying production, measuring costs and benefits, and finding data sources. Many NTFP markets are informal, and market players may have an interest in withholding information. Data about geographic and temporal distribution, production cost, quantity harvested, and price may therefore be limited. In two case studies, we explore the nuances of estimating ESV of forests for medicinal products.

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Financial and Economic Evaluation Guidelines for International Forestry Projects

Cited by 11 publications

References 9 publications

Community Forestry Enterprises in Mexico: Sustainability and Competitiveness

Community Forestry Enterprises in Mexico: Sustainability and Competitiveness

An analysis of potential investment returns of planted forests in South China

Estimating the value of forests for provisioning non-timber forest products to market: concepts, approaches, and case studies

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