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This article is a reply to the comment of Wagner (2009) concerning our article in this issue (Webster et al. 2009). We believe that our use of rate of value growth (RVG), which is analogous to internal rate of return, is acceptable and even preferred for the situation we address. We agree with Wagner that maximization of net present value (NPV) is generally a preferred criterion if certain general conditions exist. As documented in the article, we recommend calculating the RVG and then comparing that value to the relevant threshold interest rate, as selected by the decisionmaker, to make the decision whether to retain a high-quality sugar maple crop tree for another cutting cycle. It is the threshold interest rate that is a true interest rate and that includes, among other things, a risk adjustment premium appropriate for this investment; the RVG was not represented as an interest rate in Webster et al. (2009). We believe RVG is a more appropriate criterion for several reasons: it is widely used by practitioners, closely related previous literature relied on similar measures, take and leave decisions are identical to the NPV criterion for interest rates 4% and above, and the perfect capital markets assumption that leads to NPV being the superior criterion is not satisfied.

Expected Rates of Value Growth for Individual Sugar Maple Crop Trees in the Great Lakes Region: A Reply to John E. Wagner's Comment