1
Chapter 13:
FINANCIAL MODELING CASE
STUDY IN FORESTRY PROJECT
EVALUATION.
Description of a generic
computer model for the
evaluation of various
forestry investments.
2
Forestry Investment Computer
Models
To evaluate the NPV and LEV of particular
plantations.
The roles of modelling in forestry
investment.
To allow sensitivity and risk
analyses of forecast variables.
To facilitate analysis of various
cropping scenarios:
eg; harvest lives, planting regimes,
species mixtures.
3
Forestry Models
Modelling is useful because:
1. There are many data types.
2. The computational inter-relationships between
data types are complex: eg rainfall/soil
type/location/species.
3. Plantation life spans are very long.
4. Many scenarios are possible.
4
Forestry Models:
Specific Vs Generic
A Specific model can evaluate individual
forestry projects.
A Generic model can evaluate a variety of
separate investment projects for a variety of
users.
5
Forestry Models:
Specific Vs Generic Choice
Specific –
Shorter development time
easier to develop
less data required
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limited to one user/one application
a once off application means that there are
no economies of scale.