Table 3.

Replacement tree establishment and maintenance schedule, cost outlay, and compounded cost (in U.S. dollars)

Year of occurrenceActivityCost outlay per occurrencezTotal cost outlayTotal cost outlay including interest (7%) after 50 years
0Tree establishment including existing tree removal, replacement tree cost, and planting$1,100$1,100$32,403
1–9General maintenance (watering and fertilizer)$20 per yr   $180  $3,587
10–46Insect control every 2 yrs$26 every 2 yrs   $468  $2,452
10–45Pruning every 5 yrs$100 every 5 yrs   $700  $3,371
Total$2,448$41,813
  • z To be consistent with the existing tree analysis, these replacement tree costs should be estimates of the actual cost outlay made in the future, that is considering inflation. In this example, they are average figures over the period (for example, $20 per year over years 1-9). ĩf, instead, the cost outlays were based on today’s costs they would need to be adjusted to include inflation by a percentage factor, similar to the adjustment in tree value. Thus, rising costs over time can be addressed by either using cost estimates that include the rising costs (inflation) or by adjusting today’s costs by percentage factor to account for inflation. The latter approach is available in forest investment analysis programs such as Quick-Silver (Vasievich 1999) to individually adjust both benefit and cost figures considering inflation.