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					Tree Age Number         Number Useable                  Tree     Volume Marketable Value      Gross    Harvest
         of Trees       of Trees   Tree              Diameter - per Tree - Wood per per Tree Harvest     and
          Before        Harvested Height -             Inches     Cubic      Tree -          Proceeds Process-
         Harvest                   Feet                            Feet    Board Feet                 ing Costs

Notes:1-3                         3, 4             5            5      6          7                            8             9             10
  1-7          100           15          (mortality and cull loss)
    8           85           20             20            8           4.5    22                          $174   $3,472               $521
   12           65           20             27           11          11.6    76                          $769 $15,382              $2,307
   16           45           10             32           14          22.2   187                        $2,372 $23,724              $3,559
   20           35            5             35           17          35.9   301                        $4,830 $24,151              $3,623
   25           30           30             39           20          55.3   465                        $9,969 $299,077            $44,861

            Assumptions                                                                                            Forestry Profits per 100 Trees
            Initial price per board-foot:                    $5       17
            Price growth rate:                               6%                                       300000
            Harvest costs:                                  15%
            Management fee:                                  6%                                       250000




                                                                                  Profit in Dollars
                                                                                                      200000
            Required rate of return:
                       Riskfree                               5%                                      150000
                       Beta                                 0.58      18
                       Market risk premium                 5.50%                                      100000
                       Country risk premium                5.50%      19
                                                                                                       50000
            Total from CAPM:                              13.69%
                                                                                                           0
            Initial cost per 100 Premium Mix:         $   2,300       20                                           1-7   8   12   16       20
                                                                                                                         Year of harvest
            IRR:                                            27%       21
                 Net    Care and Net-Profit Cumulative Present
               Harvest Manage-     per         Net      Value
               Proceeds ment Fee Harvest Proceeds


                      11              12   13, 14        15          16

                  $2,951          $177   $2,774       $2,774    $    994
                 $13,074          $784 $12,290       $15,064    $ 2,636
                 $20,165        $1,210 $18,956       $34,019    $ 2,433
                 $20,529        $1,232 $19,297       $53,316    $ 1,483
                $254,215       $15,253 $238,962     $292,279    $ 9,667
                                                               $ 17,212
ofits per 100 Trees




                      Profit
                      Present value




               25
                 Usable      Gross       Net
        Trees    wood -    harvest   harvest
Year harvested board feet proceeds proceeds
   0      -100                     $ (2,300)
   1                                       0
   2                                       0
   3                                       0
   4                                       0
   5                                       0
   6                                       0
   7                                       0
   8        20       436      3472   $2,774
   9                                       0
  10                                       0
  11                                       0
  12        20     1529      15382 $12,290
  13                                       0
  14                                       0
  15                                       0
  16        10     1868      23724 $18,956
  17                                       0
  18                                       0
  19                                       0
  20         5     1506      24151 $19,297
  21                                       0
  22                                       0
  23                                       0
  24                                       0
  25        30    13937     299077 $238,962

IRR                                    27%
Notes to Projections
1. Method taken from TATF, a hardwood forestry company in Costa Rica. See
http://tropicalhardwoods.com/htm/main/projections.htm. These projections are based upon a beginning price of
$5.00 per board foot of premium hardwoods. Information taken from
http://www.cheyennesales.com/hardwood/alvaprices.htm (year 2000 prices). Examples: Bocote $13, Cocobola
$21, Purpleheart $5, Mahogany $5.50.

2. The projections in the table are based upon the price of hardwoods increasing at 6% per year. However,
according to the FAO Forest Products Prices, the median export/import prices of teak actually rose at an
average rate of 9.7% per year for the 18 years from 1970 to 1988 (the last year of the report), and 13.2% per
year for the last four years of the report. Hardwood prices have been rising at a rate much greater than the 6%

3. Both the timing and number of trees harvested are based upon the latest silvicultural practices derived from
years of experience in teak plantations. The actual harvests of your trees will be determined by professional
foresters, who monitor the growth profiles of trees in each plantation.

4. These projections include a mortality and cull loss of 15%. The most likely period of mortality or cull loss is
during the first years after field planting.

5. Height and diameter growth estimates are based upon growth rates obtained in plantations in the Caribbean
and Central America.

6. Estimated volume per tree is arrived at by multiplying the basal area of the tree (Pi x (1/2 diameter) 2) times the
usable height of the tree, and then reducing the result by 35%, since a tree trunk is not a true cylinder. These
projections are based upon the volume of the trunks and do not include the additional wood volume that may be
obtained from the larger branches in the later harvests.

7. The estimated amount of marketable wood per tree is stated in board feet, a standard measure of wood used
in the U.S. One board foot of wood is one foot square by one inch thick (1' x 1' x 1"). There are 12 board feet in a
cubic foot of lumber and 424 board feet in a cubic meter of lumber. The estimate of marketable wood is based
upon the estimated volume per tree in cubic feet, multiplied times 12 to obtain the number of board feet, and
then reduced by the estimated amount of processing waste, which is sawing losses and damage to the logs
while being harvested, transported and processed. The inefficiency of smaller diameter logs results in greater
sawing loss on younger, smaller trees. Accordingly, we have subtracted a processing waste of 60% for the 6 to 9
year old trees harvested, 45% for the 12 year old trees, and 30% for those 16 years old and older.

8. The value per tree is the estimated value of the lumber from each tree. This is arrived at by multiplying the
estimated number of marketable board feet per tree, times the projected price per board foot at the time of
harvest, using the beginning price per board foot (note 1) and annual increases of 6%. See Notes 1 and 2 above.
The projected values per tree are based only upon the value of lumber the tree may produce and do not include
any estimate of the premium value which veneer logs may bring.

9. Gross harvest proceeds, the estimated gross proceeds from the sale of the lumber from each harvest, is
arrived at by multiplying the estimated value per tree times the number of trees harvested in that thinning or

10. Harvest and processing costs are the direct costs of harvesting the trees, transporting logs to the sawmill and
having them sawn into marketable lumber. For these projections we have assumed that the harvest and
processing costs will be 15% of gross harvest proceeds and will increase at the same rate as the increases in

11. Net harvest proceeds are arrived at by subtracting the estimated harvest and processing costs from your
gross harvest proceeds.
12. The care and management fee is the TATF charge for managing the care and maintenance of your trees and
the harvest, processing and sale of your hardwoods. Our care and management fee is 6% of the net harvest

13. Net profit per harvest is estimated net cash flow from each harvest, arrived at by subtracting TATF care and
management fee from the net harvest proceeds.

14. Especially for the earliest thinnings, it would be good to anticipate as much as a year or more delay from the
time of the thinning harvest until your lumber is milled, dried, and marketed, if that is your wish. This anticipated
delay is incorporated into the calculations of the IRR for the first and second thinnings.

15. Cumulative net proceeds is a running total of estimated cash flow from the harvests of the trees.

16. Value today based on CAPM rate of return

17. See note 1

18. Deleveraged, decashed beta of "paper and forest products" fims from
http://pages.stern.nyu.edu/~adamodar/New_Home_Page/datafile/Betas.html

19. Country risk premium from comparing Costa Rica Brady bond yields with US Treasury yields, 2000

20. Actual price per 100 with 500 minimum, January 2003

21. The internal rate of return, or IRR, is the calculation of the annual compound yield of the projected cash flow.
TATF Premium Mixture of Costa Rican hardwoods

 Mahogany Considered by many to be the world's premier wood for fine cabinetry and fine furniture,
 mahogany is becoming increasingly scarce as loggers go deeper and deeper into the natural forest to find

 Cocobolo One of the true tropical rosewoods, cocobolo is an extremely beautiful, heavy oily wood that has
 become so scarce in parts of its original range that it is sometimes sold by the pound.

 Primavera Also called white mahogany because of its beauty and similarity in appearance to mahogany, only
 lighter in color, primavera is a premium blonde wood sought for fine furniture and cabinetry.

 Trebol or Macacauba A beautiful red to red-brown hardwood sought for fine furniture and cabinetry, trebol is
 nearing extinction in many parts of its original range.

 Brazilian Cherry Prized for its beauty and sought for fine furniture, cabinetry and flooring, Brazilian cherry has
 been harvested nearly out of existence outside of parks and reserves.

 Bocote A particularly beautiful hardwood, bocote is light to golden brown. Used for fine cabinetry, fine
 furniture and boat decking, bocote is becoming scarce in many parts of its original range.

 Purpleheart A uniquely beautiful purple wood, prized for inlay work and fine furniture and cabinetry,
 purpleheart is nearing extinction in many parts of its original range.

 Goncalo Alves Sought for its outstanding honey-brown striped wood for fine furniture, cabinetry, and beautiful
 turned bowls, goncalo alves is becoming increasingly scarce outside of parks and reserves.

 Ipe or Lapacho This beautiful olive-brown wood is used for furniture and flooring, and also for boardwalks
 because of its durability. Ipe is becoming increasingly scarce in many parts of its original range.

 Peroba Rosa Heavily exploited in the past because of its durability, and now for its beautiful pinkish wood,
 peroba rosa is now very rare in parts of its original range.

 Roble Roble's beautiful chestnut-brown wood is used for boat building and for fine furniture and cabinetry.
 Roble is becoming increasingly scarce outside of the protection of parks and reserves.

 Santa Maria Pinkish to reddish-brown, Santa Maria is sought for beautiful cabinetry and veneers. Santa Maria
 is listed as occasional to rare, even in parks and reserves.

 Madero Negro This beautiful flecked dark brown to black wood is not yet well known in the U.S. Madero negro
 used to be used for its durability, but now is sought for furniture, cabinetry and artisanry, and now occurs only
 occasionally naturally.

 Wild Tambran Wild tambran's excellent, dark reddish-brown wood is sought for furniture, cabinetry and
 figured veneers. Wild tambran is now increasingly rare outside of parks and reserves.
Swietenia macrophylla


Dalbergia retusa


Cybistax donnellsmithii


Platymiscium spp.


Hymenaea courbaril


Cordia alliodora


Peltogyne spp.


Astronium graveolens


Tabebuia spp.


Aspidosperma Spp.


Tabebuia rosea


Calophyllum brasiliense


Gliricidia sepium



Pithecellobium arboreum