Financial Analysis of Timber Investments
Financial Analysis of Timber Investments
Financial Analysis of Timber Investments 1. MODERN FINANCIAL ANALYSIS OF TIMBER INVESTMENTS 2. EVOLUTION OF TIMBERLAND AS AN ASSET CLASS 3. CONCLUSION
Financial Analysis of Timber Investments 1. MODERN FINANCIALANALYSIS OF TIMBER INVESTMENTS 2. EVOLUTION OF TIMBERLAND AS AN ASSET CLASS 3. CONCLUSION
MODERN FINANCIAL ANALYSIS OF TIMBER INVESTMENTS o Capital budgeting Techniques Capital asset Pricing model o Timber Investment Analyses Using CAPM and Capital Budgeting Techniques e Timber investments and the efficient Frontier o Timber Investments and Option pricing
MODERN FINANCIAL ANALYSIS OF TIMBER INVESTMENTS u Capital Budgeting Techniques u Capital Asset Pricing Model u Timber Investment Analyses Using CAPM and Capital Budgeting Techniques u Timber Investments and the Efficient Frontier u Timber Investments and Option Pricing
Capital Budgeting Techniques The most often used capital budgeting criteria for forestry investments are the net present value (NPV), land expectation value (LEv), and internal rate of return (IRR)
Capital Budgeting Techniques uThe most often used capital budgeting criteria for forestry investments are the net present value (NPV), land expectation value (LEV), and internal rate of return (IRR)
Capital Budgeting Techniques NPy ∑B1(1+i)-1-∑C(1+i) o The NPv converts a series of periodic income flows to a single number that can be used to compare mutually exclusive investment alternatives over the same investment horizon at a given discount rate o A positive NPV would be accepted an investment if enough capital were available. If negative, one would reject that investment
Capital Budgeting Techniques T t t t T t NPV B t i t C i 0 0 (1 ) (1 ) u The NPV converts a series of periodic income flows to a single number that can be used to compare mutually exclusive investment alternatives over the same investment horizon at a given discount rate. u A positive NPV would be accepted an investment if enough capital were available. If negative, one would reject that investment