1. Soil Expectation Value (SEV) Financial criteria used to make even-aged timber management decisions. Simply the year zero value of a perpetual series of even-aged rotations Also known as Faustman formula

2. Net Present Value (NPV) for a Single Rotation NPV may include the initial cost of land and land value at time r where, N t = net cash flow in year t (R t - C t ) R t = revenue in year t C t = expenditure year t n = r = rotation length i = discount rate

3. SEV timeline PV 1 1st rotation PV 2 2nd rotation PV 3 3rd rotation PVn n th rotation PV 0 of perpetual series PV 1 = PV 2 = PV 3 = ……… PV n

4. Soil Expectation Value (SEV) r ∑ (Rt-Ct) (1+i) r-t t = 0 SEV = (1+i) r - 1 where, r = rotation length in years, i = discount rate t = index on year” 0, 1, 2,... r R t = revenues in t th year C t = expenditures in t th year

5. Example