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the owner would have paid if the property had been subject to the
ad valorem tax rate for the preceding 10 years.
In the present case, we are trying to determine what a
hypothetical buyer would pay for an entire tree farm, not just
the delivered logs. Thus, we think that a buyer would consider
such costs as slash burning and reforestation, because those are
costs associated with operating a tree farm. Petitioner has not
persuaded us, however, that a hypothetical buyer would consider
scaling costs, as those costs are normally incurred by the
purchaser of the timber, not the owner of the tree farm.
Respondent also argues that petitioner’s expert has
overstated the contract logging costs. The parties agree that
petitioner’s actual costs for 1985 are relevant in determining
the reasonableness of any cost estimate. Petitioner claims that
its actual costs were approximately $161/MBF in 1985, which
establishes the reasonableness of Mr. Granvall’s estimate of
$154/MBF. However, petitioner's actual cost records include a
substantial amount for general administrative costs that
significantly exceeds the amount of administrative costs that
even petitioner's expert includes in costs. Respondent, on the
other hand, claims that petitioner’s actual costs, using only the
cost items listed by petitioner's expert, were approximately
$107/MBF, which confirms the reasonableness of Mr. Prochnau’s
estimate of $106.48/MBF. However, this is partially attributable
to differences in the way the cost elements are described in the
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