Financial Assessment of Timber Production Investments

Financial Assessment

Evaluation of monetary aspects of timber projects.

Economic Assessment

Evaluation of societal costs and benefits.

Net Revenue

Profit after deducting costs from revenues.

Market Price

Price determined by supply and demand.

Shadow Price

Estimated price reflecting true social cost.

Economic Benefits

Advantages gained from timber production.

Financial Revenue

Income generated from timber sales.

Externalities

Indirect effects of timber production on society.

Establishment Costs

Initial expenses for setting up timber production.

Maintenance Costs

Ongoing expenses for managing timber resources.

Harvesting Costs

Expenses related to timber extraction.

Erosion Costs

Financial impact of soil degradation.

Time Value of Money

Future money worth less than present money.

Interest

Cost of borrowing money over time.

Interest Rate

Percentage charged for borrowing money.

Simple Interest

Interest calculated only on principal amount.

Compound Interest

Interest calculated on principal and accumulated interest.

Cashflow Table

Summary of cash inflows and outflows.

Internal Rate of Return (IRR)

Discount rate making NPV zero.

Payback Period (PP)

Time taken to recover initial investment.

Benefit-Cost Ratio (BCR)

Ratio comparing benefits to costs.

Net Present Value (NPV)

Difference between present value of revenues and costs.

Return on Investment (ROI)

Profitability measure of investment efficiency.