By Cole T.
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Extra info for A 75 Angle Constraint for Plane Minimal T1 Trees
2 shows that &170,614 out of the total output of &279,872 comes from the valuation change. This has implications for cash flows, as we will see later on. costs Direct costs The cost section of this second budgeting step is produced in a similar fashion. Douglas takes account first of direct costs. 3 shows the cost categories which Douglas considers to be direct costs - both for the compartments and subcompartments of the forest and for the nursery enterprise. Note that, because the estate does not employ much of its own labour and machinery, and because he has classified the cost of the forest worker under overheads, Douglas has not classified any of the costs as on-costs.
Some costs, such as Depreciation - an estimated cost of the loss in value of a machine, building or similar item through wear, tear and obsolescence - see Chapter 5. 30 Forestry Budgets and Accounts maintenance and protection costs related to the land, can be reasonably allocated by area. Others, such as haulage and marketing of produce, could be allocated, not perhaps by value of production, but by value of sales. But allocating most of the overheads by sales or production would mean that many forest enterprises would have little or no allocation during the major part of the rotation.
And if the changeover occurred at age 46, there would be a huge jump in the valuation. Nevertheless, if the devastation value approach is followed for the later years of a rotation, there does not seem to be any alternative but to take the accumulated net costs approach for the earlier years of the rotation. And the jump, or drop, occurring at the changeover point does not have to be much of a problem if a point in the rotation was chosen at which both approaches gave a similar valuation: year 36 for instance in Fig.