Project 1-solutions - Total acres Computation of cashflows...

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Total acres 7500 Computation of cashflows from thinning Inflow from thinning today at year 20 9000000 Less Taxes @ 35% 3150000 Post tax cash flow from thinning 5850000 YEARS FROM TODAY TO BEGIN HARVEST HARVEST (MBF) PER ACRE TIMBER GRADE 1P 2P 3P 20 6 10% 40% 50% 25 8.2 13% 46% 41% 30 9.4 17% 48% 35% 35 10.5 19% 51% 30% Computation of price (inflation adjusted) Inflation rate 3.70% TIMBER GRADE PRICE PER MBF Years 20 25 30 35 1P $1,150.00 $1,379.09 $1,653.81 $1,983.26 2P $990.00 $1,187.21 $1,423.71 $1,707.33 3P $840.00 $1,007.33 $1,208.00 $1,448.64 Cash flow from the project Years 20 25 30 35 Harvest (MBF) per acre 6 8.2 9.4 10.5 Total MBF 45000 61500 70500 78750 Revenue from 1P $5,175,000 $11,025,799 $19,820,903 $29,674,496 Revenue from 2P $17,820,000 $33,586,282 $48,178,482 $68,570,494 Revenue from 3P $18,900,000 $25,399,902 $29,807,394 $34,224,133 Total revenue $41,895,000 $70,011,983 $97,806,780 $132,469,123 Less: 5% loss $2,094,750 $3,500,599 $4,890,339 $6,623,456 Net revenue $39,800,250
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