CF Forest Economics & Timber Valuation

Question 1

What is 'stumpage value' in timber economics?

Accepted Answer

The value of standing timber to the seller after deducting harvesting and transportation costs

Answer

The market price of lumber at the sawmill gate

Answer

The total revenue generated from a timber sale

Answer

The assessed tax value of forested land

Question 2

Which valuation method calculates the present value of all future revenues and costs over an infinite series of forest rotations?

Accepted Answer

Land Expectation Value (LEV) using the Faustmann formula

Answer

Net present value (NPV) analysis

Answer

Comparable sales approach

Answer

Capitalized income method

Question 3

In forest economics, what does the term 'rotation age' refer to?

Accepted Answer

The planned age at which a stand is harvested and regenerated

Answer

The age at which trees are first thinned

Answer

The number of years between prescribed burns

Answer

The time required for soil nutrients to recover after harvest

Question 4

When performing a timber appraisal, which inventory metric is most directly used to estimate total timber value?

Accepted Answer

Merchantable volume by species and product class

Answer

Basal area per acre

Answer

Average stand height

Answer

Trees per acre

Question 5

What is the 'internal rate of return' (IRR) in a forest investment context?

Accepted Answer

The discount rate at which the net present value of an investment equals zero

Answer

The discount rate that maximizes timber volume production

Answer

The annual percentage increase in stumpage prices

Answer

The ratio of revenues to total production costs

Question 6

Which of the following best describes 'opportunity cost' in forestland management decisions?

Accepted Answer

The value of the next-best alternative use of the land or capital foregone

Answer

The cost of replanting after a catastrophic fire

Answer

The administrative cost of obtaining timber sale permits

Answer

The price differential between softwood and hardwood stumpage

Question 7

The 'income approach' to forestland valuation estimates value primarily based on:

Accepted Answer

The present value of projected future net income from the property

Answer

Recent comparable sales of similar forested properties

Answer

The replacement cost of all merchantable timber on the site

Answer

The assessed county tax value adjusted for market conditions