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TreeCents

   Timber Stand Investment Analyzer ©Forest Econ Inc.

Timber investments are among the hardest to analyze. It takes magic to pick the right formulation, there are a jillion variables, and even professional economists may screw up the complex math.

Don’t skip financial analyses just cause they have been complicated and frustrating—long-term timber investments are too variable and risky. Small project differences can separate bonanzas from bankruptcy. Let TreeCents analyze options for you. You’ll never have to face ugly complicated Faustmann calculations like this one again.

 TreeCents is:

TreeCents is is a user-friendly decision assistance template that analyzes timber investments for private forest owners. It handles simple or complex investment profiles that users can tailor to the details of their own financial and silvicultural conditions. TreeCents programming is universal and it runs in EXCEL™, a program that is widely available and constantly updated without affecting existing data sets.

TreeCents does:

TreeCents organizes data for 4 different land use investments including: new timber plantations, existing timber stands (whether even or uneven-age), ag crops and pasture. TreeCents leads you through the identification and data requirements of various single acre investment analyses unique to your forest. Button navigation and prompted data entries make it easy to represent your unique timber project. It does automatic financial calculations by matching appropriate formulas to project type and data, then spits out before and after-tax financial feasibility criteria in easy-to-interpret reports. It has built-in optimistic and pessimistic brackets to help you weigh the sensitivity of projects. TreeCents also simulates feasibility changes to help you second-guess assumptions or data that are poorly known.

TreeCents data needs:

You supply financial and tax variables to your choice of detail, as well as your own market expectations. You design and test silvicultural regimes that can have up to 5 harvest entries. Each added harvest entry requires growth responses to previous practices and expected timber harvest volumes. TreeCents includes some general reference yield tables, but users should use project-specific harvest volumes from experience or more detailed growth & yield tables or simulators from other sources.

Why personal tax variables?... Because TreeCents calculates tax effects too--income, capital gains, yield, severance, ad valorem, plus details such as cross-deduction, amortization, capitalization and basis depletion.

TreeCents tells you:

TreeCents calculates four standard financial criteria based on discounted cash flows to measure absolute feasibility for project variants that start from the same initial condition. TreeCents also calculates incremental criteria to compare small changes in on-going projects. Then you can use TreeCents to redesign and compare project variants and evaluate the quality of expected results.

TreeCents warns you when investment criteria are not logically  comparable. With small extra input, TreeCents normalizes criteria into relative investment indicators that compare returns between unlike projects.

Learning TreeCents :

There is no programming to do. It takes <5 minutes to follow default examples through all the analytical steps. Loading your own first project may take 20 minutes or so, but subsequent analyses use mostly the same data. You can toggle to the complete operations manual and tutorial while TreeCents is running. It is easy to understand and explains each window in sequence.

You can easily see how TreeCents works from this site. Go to the tutorial page and down-load the example user manual. It is filled with pictures of imbedded program windows that run most of the calculations modules.

TreeCents help:

Every program window has clear user instructions. Then there are default example investments to guide you in project design and data selection. Each program window also has help buttons for more detail. Critical assumptions and user actions are flagged with alarm bells for pop-up user warnings. Interpretation guides and definitions are available at the touch of a button. The complete manual can be loaded in the background--so you just toggle to enlightenment. You can always back-step to a previous program window, or if you get befuddled just quit, hyperventilate and start over.

TreeCents  system requirements:

TreeCents runs on IBM personal computers. Minimum chip speed is 233 Mhz with 32 Mb RAM. TreeCents works  faster with more. You need WINDOWS 95 and EXCEL 97 or later. The .pdf manual can be read with ADOBE reader, a free download.

TreeCents design criteria:

We've watched private forest owners avoid financial analyses for years. And if the truth be known, forestry consultants are too. We knew that no one would buy TreeCents (much less use it) unless it radically changed the timber investment evaluation experience. To achieve this popular utility our design follows four criteria.

The finished product had to be:

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Pretty—Friendly colors, imbedded familiar pictures of appealing forestry scenes and practices, coupled with a well-balanced sense of order to create a welcoming, non-threatening decision environment for TreeCents users.

 

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Easy—The EXCEL platform is universally understood and supported. You don't have to do any programming. Button navigation takes you effortlessly along a clear logical process path. Data queries prompt users to visualize all the types of information that affect timber project profitability in familiar forestry terms. Formats are clear, flexible and straight-forward. Real default cases make project specification obvious. All the nasty conversions, formulations and calculations are well-hidden. There are liberal alarm, help and definitions references, plus you can toggle back and forth to the ample manual.

 

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Cheap—Most other timber investment programs are designed for large industrial users and cost $ thousands. Although we had to raise prices for the coming new release in 2006, we've tried to keep TreeCents small and efficient to lower costs and passed the savings on. Its cheap to buy and use. Our goal is to make thinking about your forestry’s profitability worth your investment in decision-making.

 

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Reliable--TreeCents calculates very flexible analyses where answers are unique for each forest project and each user. To do that the formulas are complex, linked and sometimes conditional, but it is hidden from view. All that complicated programming has been checked by analysts and field tested by forest owners and forestry consultants. Simplifying assumptions do cause a few approximations, but project comparisons are reliable.

 

Copyright © 2003 Forest Econ Inc.
Last modified: 12/19/08