Abstract

SUMMARY The mean internal rate of return (IRR) on Leucaena leucocephala plantations in Taiwan at the end of the first 5-year rotation was determined by Hertz's method, a computer-based capital investment risk analysis procedure, to be 7.4% with standard deviation of 16.9%. This IRR is higher than can be obtained for other tree species in Taiwan. The cumulative probability of obtaining an IRR greater than 9% (the secured loan rate) is 38%. Thus there is some potential for making a profit from planting L. leucocephala in Taiwan but proper site selection is essential.

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