On November 13, 1998, at 1600 hours mountain standard time, a Cessna 172N, N2401E, force landed in rough terrain 15 miles west of Prescott, Arizona, following a loss of engine power. The aircraft sustained substantial damage. The flight instructor and dual student, the sole occupants, were not injured. The local instructional flight was conducted under 14 CFR Part 91 and originated at the Prescott Airport at 1510. Visual meteorological conditions prevailed and no flight plan was filed. The flight instructor reported that he and the student were conducting a simulated engine failure from approximately 3,500 feet agl. He reported that the student inadvertently shut the fuel selector off without him noticing. About 500 feet agl, the flight instructor asked the student to do a go-around. There was no response when full throttle was applied, so the instructor took the controls and performed an emergency landing. The left landing gear hit a tree stump and was sheared off. The aircraft came to rest in an upright position.