BC Coastal Logging Contract

Overview Contract Services Cost analysis Assumptions Operational Decisions

Madill 009Madill 071 Wash 118A Madill 122 Tower Yarder Mini Tower Swing Yarder (as is)(rebuilt) OWNERSHIP COSTS Purchase Price (P) $ $57, $130, $110,000.00$470,000.00$260, Expected Life (Y) y Expected Life (H) h Sheduled hours/year (h) h 1440 Insurance Rate (Ins) % Salvage Value (S) $25,000.00$50, Average Investment (AVI)=((P+S)/2) $ $41,250.00$90,000.00$80,000.00$260,000.00$155, Loss in resale value ((P-S)/H) $/h $3.76$5.56$13.89$48.61$24.31 Insurance ((INS*AVI)/h) $/h $0.57$1.25$1.11$3.61$2.15 Total Ownership Cost (OW) $/h $4.33$6.81$15.00$52.22$26.46

CREWBUS OWNERSHIP COSTS Crew Bus Annual Depreciation $6, Daily Depreciation$19.05 Fuel, Oil, & Maintenance$30.00 Total Crew Bus Cost$49.05 Total Ownership Cost (OW) $/h$6.13

TOTAL OWNERSHIP AND OPERATING COSTS (OW+OP) $/h TOTAL DAILY COST ((OW+OP)*8) $ EXPECTED PRODUCTION (EP) m 3 /day EXPECTED COST (((OW+OP)*8)/EP) $/m Madill 009Madill 071Wash 118A Madill 122 Tower YarderMini TowerSwing Yarder (as is)(rebuilt)

Final Costs

Purchases 1994 Linkbelt LS4300 –$450, Caterpillar 980F Wheel Loader –$420,000 Washington 118A Swing Yarder Rebuild –$360,000

Sales 3-Hayes HD35 Logging Trucks 2-Pacific P10 Logging Trucks 1-Kenworth 849 Logging Truck Cat D8H Cat D8K Pacific Dump P9 2-Cat 966C Cat 518 Skidder

Net Sales Total Purchases - $1,230,000 Total Sales - $361,000 Net Sales - $869,000

Total Investment Purchase Price $1,703,100 (+ “good will”) Purchase Price + Net Sales $2,572,100

Financing Loan Required - $572,100 Financing Cost – 22.2% of profit = $203,300