A timber investment
- requires an extended length of time to generate a profit.
- offers the landowner many ways to generate a profit.
- has some risks associated with losses due to pests, disease and fire.
- all of the above are true.
A landowner can use the principal of compounding interest to
- decide when to fertilize trees.
- decide when to have a timber harvest.
- determine the most economical spacing for their trees.
- determine how much their timber is worth.
Timber has all the following advantages BUT:
- Harvesting can be timed to provide periodic returns.
- Reforestation often comes with tax incentives.
- Little up-front investiment in the capital is needed.
- Timber income qualifies as a capital gain.
Timber and row crops are similar types of investments in terms of cash flow, income tax, and marketing.
- True.
- False