Financial Evaluation of Forestry Investments: Common Pitfalls and Guidelines for Better Analyses

Steve R Harrison; John L Herbohn

doi:10.1007/s11842-016-9334-1

Back

Financial Evaluation of Forestry Investments: Common Pitfalls and Guidelines for Better Analyses

Journal article

Peer reviewed

Financial Evaluation of Forestry Investments: Common Pitfalls and Guidelines for Better Analyses

Steve R Harrison and John L Herbohn

Small-Scale Forestry, Vol.15(4), pp.463-479

2016

DOI: https://doi.org/10.1007/s11842-016-9334-1

Files and links (1)

url

https://doi.org/10.1007/s11842-016-9334-1View

Published Version

Abstract

forestry financial analysis

plantation costs and returns

relevant cash flows

weighted average cost of capital

current versus constant prices

sunk costs

Many of the papers submitted to Small-scale Forestry contain financial analyses of forestry investments. Unfortunately, both the method of analysis and the reporting of the analysis in initial submissions are often inadequate, and result in manuscripts being rejected or requiring major revision prior to acceptance. This paper discusses some of the common deficiencies in financial analyses in research papers, and presents a simplified financial analysis of a forestry plantation development to illustrate key points. Simple guidelines are presented to overcome common major weaknesses, for example in identifying relevant cash flows, confusion between financial and economic analysis, dealing with capital outlays, and determining an appropriate discount rate.

Details

Title: Financial Evaluation of Forestry Investments: Common Pitfalls and Guidelines for Better Analyses
Authors: Steve R Harrison (Corresponding Author) - University of the Sunshine Coast - Faculty of Arts, Business and Law
John L Herbohn (Author) - University of the Sunshine Coast - Faculty of Arts, Business and Law
Publication details: Small-Scale Forestry, Vol.15(4), pp.463-479
Publisher: Springer Netherlands
Date published: 2016
DOI: 10.1007/s11842-016-9334-1
ISSN: 1873-7617; 1873-7854
Organisation Unit: Australian Centre for Pacific Islands Research; Tropical Forests and People Research Centre; University of the Sunshine Coast, Queensland; Forest Research Institute
Language: English
Record Identifier: 99450059902621
Output Type: Journal article

Metrics

2 File views/ downloads

1776 Record Views

16 Times Cited - Web of Science

InCites Highlights

These are selected metrics from InCites Benchmarking & Analytics tool, related to this output

Collaboration types: Domestic collaboration
Web Of Science research areas: Forestry

UN Sustainable Development Goals (SDGs)

This output has contributed to the advancement of the following goals:

Source: InCites