Abstract

Production activity of any kind entails investment of resources that have alternnate uses. In the forestry sector, including natural forests, there are infinite investment opportunities for production that have different time, cost and benefit profiles. Therefore, there has to be some criteria for making efficient investment decisions or optimal choice of projects. And a forestry official/manager has to have a clear understanding of the fundamentals of investment criteria (project evaluation) . This paper deals with the basic elements of benefit-cost analysis (BCA), which is a comprehensive criterion that helps investment decisions in general, and its application to project evaluation in forestry. In general economics, there have been extensive discussions on benefit-cost analysis and now, there is voluminous literature available for detailed study reference. Hence, the aim here is to introduce the basic features of benefit-cost analysis and the problems in its