Crafted Hardwoods — Financial Modelling
Off-take Agreement Valuation
Model the net present value of a timber supply agreement across three value streams: price arbitrage, risk avoidance, and strategic revenue.
01 Deal Details

02 Model Inputs
1–25 years
%
Annual volume escalation — all species
%
Annual market price escalation — all species
%
0 = fixed; 2.5 = CPI-linked escalation

Species Market Rate ($/m³) Contract Rate ($/m³) Year 1 Volume (m³)

%
Weighted average cost of capital
%
Supply uncertainty / hedging value
$
Brand, exclusivity, or partnership value
Customer NPV — Total Deal Value
Enter inputs above to calculate
Undiscounted
Total Value
over full term
Total Volume
Contracted
m³ total
Contracted
Revenue
total billed
Value Stream 1 — Price Arbitrage
Market Value (undiscounted)
Contracted Revenue
Avoided Market Cost
Value Stream 2 — Risk Avoidance
Risk rate applied
Applied to market value
Total Risk Value
Value Stream 3 — Strategic Revenue
Annual strategic value
Contract term
Total Strategic Revenue
03 Year-by-Year Breakdown
Yr Volume (m³) Market Price Contract Price Market Value Contract Rev Price Arbitrage Risk Value Strategic Rev Total Benefit Discount Factor NPV Contrib
NPV methodology: Each year's total benefit is discounted at the selected rate, compounded annually. Market price and volume compound at their respective growth rates. Contract price compounds at the Contract Price Growth rate (0% = fully fixed). Risk value = market value × risk %. Strategic revenue is a flat annual amount.
Customer NPV