AN ECONOMIC ANALYSIS OF PLANTING CHINA FIR IN TAIWAN

Abstract

The mean internal rate of return (IRR) on China fir plantation in Taiwan at the end of the first 15-year rotation was determined by Hert'z method, a computer-based capital investment risk analysis procedure, to be 5.8% with standard deviation of 2.9%. The cumulative probability of obtaining an IRR greater than 3% (the government secured loan rate) is 82%. Thus there is some potential for making a profit from planting China fir in Taiwan, if one can secure loan from government only.