| Abstract: | The Nature of profits within the framework of the economic theory is discussed. The difficulties which are met in the calculation of profits in forestry are briefly described and the underlying assumption that the relative difference between prices and production costs will not change with time is discussed. The forest economist should distinguish between a normal forest and a periodic forest. A periodic forest gives intermittent yields; a normal forest produces a regular annual flow of income and expenditures. The equations which should be used for the estimation of profits in these types of forests are derived and illustrated with a practical example. The consequences of the formative period elapsing between the time of initial planting and attainment of the normal forest are discussed. |
