MATERIALS AND METHODS Assumptions Made
i. The analysis uses a project life of 15 years, for which a discount factor of 26% is employed as cost of capital being the lending rate of the Agricultural Development Bank to Agriculture and Forestry.
ii. The calculations are done in constant currency terms, thus involve no yearly cost escalation.
iii. Environmental and climatic conditions prevailing are favourable.
iv. Rotation period is 15 years. v. A planting distance of 3.0m x 3.0m was considered. vi. The volume per tree at the end of 15 years is 0.50m3
vii. Teak price of US$350/m3 quoted by the Timber Industries Development Division of the Ghana Forestry Commission was used.
viii. The exchange rate of the Ghanaian cedis to the United States dollar is GH¢3 = $1
ix. Risk of fires, wind-blown and diseases are minimal and hence ignored.
x. There is no taxation of any kind on the trees sold.