Version 1
: Received: 17 January 2019 / Approved: 21 January 2019 / Online: 21 January 2019 (07:28:01 CET)
How to cite:
Kärenlampi, P.P. Wealth Accumulation in Rotation Forestry – Failure of the Net Present Value Optimization?. Preprints2019, 2019010194. https://doi.org/10.20944/preprints201901.0194.v1
Kärenlampi, P.P. Wealth Accumulation in Rotation Forestry – Failure of the Net Present Value Optimization?. Preprints 2019, 2019010194. https://doi.org/10.20944/preprints201901.0194.v1
Kärenlampi, P.P. Wealth Accumulation in Rotation Forestry – Failure of the Net Present Value Optimization?. Preprints2019, 2019010194. https://doi.org/10.20944/preprints201901.0194.v1
APA Style
Kärenlampi, P.P. (2019). Wealth Accumulation in Rotation Forestry – Failure of the Net Present Value Optimization?. Preprints. https://doi.org/10.20944/preprints201901.0194.v1
Chicago/Turabian Style
Kärenlampi, P.P. 2019 "Wealth Accumulation in Rotation Forestry – Failure of the Net Present Value Optimization?" Preprints. https://doi.org/10.20944/preprints201901.0194.v1
Abstract
We investigate wealth accumulation in forestry, assuming that revenues are re-invested. Three different optimization criteria are compared, two of which are based on cash flows, the third financially grounded. Direct optimization of wealth appreciation rate always yields best results. Procedures gained by maximizing internal rate of return are only slightly inferior. With external discounting interest rate, the maximization of net present value yields arbitrary results, with at worst devastating financial consequences.
Keywords
capital return; real estate; capitalization
Subject
Biology and Life Sciences, Forestry
Copyright:
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
