The document summarizes the details of a timber harvest plan for Bunyan Lumber over multiple periods. It includes details like total acreage, pond values, costs of operations, tax rates, and cash flows. The plan involves an initial harvest in 25 years with subsequent thinnings and harvests every 20 years. Running the numbers, the net present value of the plan is estimated to be over $4.8 million.
The document summarizes the details of a timber harvest plan for Bunyan Lumber over multiple periods. It includes details like total acreage, pond values, costs of operations, tax rates, and cash flows. The plan involves an initial harvest in 25 years with subsequent thinnings and harvests every 20 years. Running the numbers, the net present value of the plan is estimated to be over $4.8 million.
The document summarizes the details of a timber harvest plan for Bunyan Lumber over multiple periods. It includes details like total acreage, pond values, costs of operations, tax rates, and cash flows. The plan involves an initial harvest in 25 years with subsequent thinnings and harvests every 20 years. Running the numbers, the net present value of the plan is estimated to be over $4.8 million.
The document summarizes the details of a timber harvest plan for Bunyan Lumber over multiple periods. It includes details like total acreage, pond values, costs of operations, tax rates, and cash flows. The plan involves an initial harvest in 25 years with subsequent thinnings and harvests every 20 years. Running the numbers, the net present value of the plan is estimated to be over $4.8 million.
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Chapter 7
Bunyan Lumber, LLC
Input area:
Total acreage 5,000
Years since original planting 20 1P pond value $ 660 2P pond value $ 630 3P pond value $ 620 Cash flow/acre from thinning $ 1,000 Years from today for harvest Harvest (MBF) to begin per acre 1P 2P 3P 20 14.1 16% 36% 48%
Defect rate 5% Tractor cost (MBF) $ 140 Road (MBF) $ 50 Sale preparation and and administrative (MBF) $ 18
Revenue $ 42,194,250 Tractor cost 9,870,000 Road 3,525,000 Sale preparation & admin 1,269,000 Excavator piling 750,000 Broadcast burning 1,500,000 Site preparation 725,000 Planting costs 1,125,000 EBIT $ 23,430,250 Taxes 8,200,588 Net income (OCF) $ 15,229,663
PV of first harvest $ 4,681,788
Next thinning will occur in 40 years, and will reoccur at this same interval. The effective real interest rate for this period is 958.17% The real rate in the conservation fund is 6.59% The effective real interest rate for the conservation fund for this period is 1183.87% Aftertax cost of convservation $ (162,500.00) Value of conservation at harvest $ (176,226.22)
PV of future thinnings $ 521,825.80
PV of future harvests $ 488,615.51 PV of conservation fund $ (49,182.52)
PV of first harvest $ 4,681,787.56 $ 4,177,464.29 $ 3,316,237.53 $ 2,606,233.04
Next thinning will occur in 40 45 50 55
The effective real interest rate 958.17% 1321.11% 1808.52% 2463.10% The real rate in the conservati 6.59% 6.59% 6.59% 6.59% The effective real interest rate for the conservation fund for this pe 1183.87% 1666.38% 2330.24% 3243.60%
PV of future harvests $ 488,615.51 $ 316,209.37 $ 183,367.60 $ 105,810.96 PV of conservation fund $ (49,182.52) $ (34,941.27) $ (24,986.89) $ (17,950.88)
Total NPV $ 5,643,046.36 $ 4,837,202.85 $ 3,751,087.59 $ 2,897,089.08
Chapter 7 Bunyan Lumber, LLC
Input area:
Total acreage 5,000
Years since original planting 20 1P pond value $ 660 2P pond value $ 630 3P pond value $ 620 Cash flow/acre from thinning $ 1,000 Years from today for harvest Harvest (MBF) to begin per acre 1P 25 16.4 20%
Defect rate 5% Tractor cost (MBF) $ 140 Road (MBF) $ 50 Sale preparation and and administrative (MBF) $ 18
Revenue $ 49,232,800 Tractor cost 11,480,000 Road 4,100,000 Sale preparation & admin 1,476,000 Excavator piling 750,000 Broadcast burning 1,500,000 Site preparation 725,000 Planting costs 1,125,000 EBIT $ 28,076,800 Taxes 9,826,880 Net income (OCF) $ 18,249,920
PV of first harvest $ 4,177,464
Next thinning will occur in 45 years, and will reoccur at this sa
The effective real interest rate for this period is 1321.11% The real rate in the conservation fund is 6.59% The effective real interest rate for the conservation fund for this period is 1666.38%
Aftertax cost of convservation $ (162,500.00)
Value of conservation at harvest $ (172,251.67)
PV of future thinnings $ 378,470.46
PV of future harvests $ 316,209.37 PV of conservation fund $ (34,941.27)
Total NPV $ 4,837,202.85
2P 3P 40% 40% nd will reoccur at this same interval. Chapter 7 Bunyan Lumber, LLC
Input area:
Total acreage 5,000
Years since original planting 20 1P pond value $ 660 2P pond value $ 630 3P pond value $ 620 Cash flow/acre from thinning $ 1,000 Years from today for harvest Harvest (MBF) to begin per acre 1P 30 17.3 22%
Defect rate 5% Tractor cost (MBF) $ 140 Road (MBF) $ 50 Sale preparation and and administrative (MBF) $ 18
Revenue $ 52,024,993 Tractor cost 12,110,000 Road 4,325,000 Sale preparation & admin 1,557,000 Excavator piling 750,000 Broadcast burning 1,500,000 Site preparation 725,000 Planting costs 1,125,000 EBIT $ 29,932,993 Taxes 10,476,547 Net income (OCF) $ 19,456,445
PV of first harvest $ 3,316,238
Next thinning will occur in 50 years, and will reoccur at this sa
The effective real interest rate for this period is 1808.52% The real rate in the conservation fund is 6.59% The effective real interest rate for the conservation fund for this period is 2330.24%
Aftertax cost of convservation $ (162,500.00)
Value of conservation at harvest $ (169,473.53)
PV of future thinnings $ 276,469.34
PV of future harvests $ 183,367.60 PV of conservation fund $ (24,986.89)
Total NPV $ 3,751,087.59
2P 3P 43% 35% nd will reoccur at this same interval. Chapter 7 Bunyan Lumber, LLC
Input area:
Total acreage 5,000
Years since original planting 20 1P pond value $ 660 2P pond value $ 630 3P pond value $ 620 Cash flow/acre from thinning $ 1,000 Years from today for harvest Harvest (MBF) to begin per acre 1P 35 18.1 24%
Defect rate 5% Tractor cost (MBF) $ 140 Road (MBF) $ 50 Sale preparation and and administrative (MBF) $ 18
Revenue $ 54,516,748 Tractor cost 12,670,000 Road 4,525,000 Sale preparation & admin 1,629,000 Excavator piling 750,000 Broadcast burning 1,500,000 Site preparation 725,000 Planting costs 1,125,000 EBIT $ 31,592,748 Taxes 11,057,462 Net income (OCF) $ 20,535,286
PV of first harvest $ 2,606,233
Next thinning will occur in 55 years, and will reoccur at this sa
The effective real interest rate for this period is 2463.10% The real rate in the conservation fund is 6.59% The effective real interest rate for the conservation fund for this period is 3243.60%
Aftertax cost of convservation $ (162,500.00)
Value of conservation at harvest $ (167,509.87)
PV of future thinnings $ 202,995.97
PV of future harvests $ 105,810.96 PV of conservation fund $ (17,950.88)
Total NPV $ 2,897,089.08
2P 3P 45% 31% nd will reoccur at this same interval.
