Investing in Timber

[fawtsc]

I am not sure how you can calculate a IRR with your formula. This is how I calculate the internal rate of return manually (without a financial calculator) is a very laborious process. And it is the real mathematical formula for such operation. This is using Excel, you can do it in less than a minute. Assuming that the cash flows (from year 0 to year 25) is in the range “D$3:Z$3”, the formula to derive the IRR is “=IRR(D$3:Z$3)” without quotes.
Now that "we know" to calculate the internal rate of return, it is important to know that IRR can only be used under certain conditions. The best way to determine if the IRR can be used is to plot the NPV of the investment against the discount rate of return. If the NPV crosses the X-axis more than once, i.e. NPV is zero more than once, than the investment is considered to have multiple internal rate of return and should be used with caution.
In our case the IRR as I expressed in my first calcualtion is the way to approach ROI for trees.
The rest is just "junk math" or what some one said about Enron "fuzzy math."
Oh! Discount rate of return you can use any calculator: such as this from E*Trade:
http://www.moneychimp.com/calculator/discount_rate_calculator.htm