Research On The Rate Of Return On Investments In The Evaluation Of Forest Resources Assets

This paper analyzed the rate of return in the evaluation of forest assets. It first set out the definition of the rate of return on investments and its composition, and respectively analyzed the nature of its two main components, e.g. commercial interest rates and investors’ expectations, and then introduced several common methods which were used to determine the rate of return on investments in evaluation practices, such as capital asset pricing model and cumulative risk model. Secondly the paper discussed how to reasonably determine the rate of return in the evaluation of forest resources assets, including inflation rate, pure interest rate, risky rate and investors’ expectations. Thirdly,the paper mainly measured forest risky rates, e.g. afforestation failure, forest fire and vandalism, in the process of management under the new situation in Fujian province, the results were that:the risk rate of afforestation failure was about0.25%, the risk rate of forest fire was approximately0.07%, the risk rate of vandalism was approximately0.22%, the risk rates of forest pests and other natural disasters were about0.45%, so the risk rates of forest management in Fujian province has reached approximately1.0%. The results showed that in the evaluation of forest resources assets the pure interest rate can be valued at3.0%, the risky rate can be valued at1.0%, the investors’expectations can be valued at1.0%to2.0%, so the rate of return on investments added to be about5.0%to6.0%. But when the levels of forest management are improved and the investment costs are increased, the investors’expectations will be correspondingly increased, so the rate of return on investments will be out of range and should be determined according to the characteristics of forestry production and management. The paper measured respectively the rates of return on investments of different types of forest management, such as the fast-growing and high-yielding plantation of Cunninghamia lanceolata and the short-rotation Eucalyptus plantation, the results were that:to Cunninghamia lanceolata plantation, the rates of return on investments were respectively:large-diameter timber was9.95%, medium-diameter timber was10.27%, and small-diameter timber was11.80%; to the short-rotation Eucalypt plantation, the rate of return on investments was10.25%.