Economic viability of the whole tree harvest under conditions of uncertainty: a study in southeastern Brazil

ABSTRACT Investments in mechanized wood harvesting operations are characterized by demanding capital and presenting uncertainties associated with productive and economic factors. The economic analysis based on the Monte Carlo method promotes accurate results by measuring the risks of these investments. Thus, we analyzed whether the mechanized wood harvesting operation consisting of self-propelled forest machines under conditions of uncertainty is economically viable, applying the Monte Carlo method for risk management. With the observance of wood harvesting in a forest planted with Eucalyptus, technical-economic coefficients were obtained for felling, extraction, and wood bundle processing operations. The time horizon was six years, with the application of the investment decision rules net present value, modified internal rate of return, and payback period discounted at the opportunity cost rate by the weighted average cost of capital. The results of the investment decision rules indicated the economic viability of the mechanized wood harvesting operation and, based on the stochastic simulation, it was possible to consider the investment as low risk for capital holders. Therefore, the mechanized wood harvesting operation consisting of self-propelled forest machines, under conditions of uncertainty, is economically viable.