One of the things that makes model railroads so fascinating for both the viewer and the operator is variation in the landscape with trains travelling along tracks at different heights. This requires creating a graded incline. Many novice modelers get frustrated when their locomotives just won't pull up a hill and are surprised to find that most engines can't pull a train on anything steeper than a 4% grade. However, there is a mathematical formula for deriving the proper slope.
Measure your available space so that you know how much room you have.
Determine the maximum height you want or need above the basic board level. This will vary from project to project based on scale or space.
Calculate the grade based on the following formula using inches as a base unit: height divided by length equals the percentage of the grade. Thus, a 1% grade will require 100 inches of track for every inch of height required. For example, a 4-inch rise requires 400 inches of track at 1%, 200 inches of track at 2% and 100 inches of track at 4%.
Place commercially produced, graduated-riser supports beneath your track along the planned grade, or cut pieces of angled landscaping foam to position beneath the track.
Lay in the cork roadbed along the track plan, temporarily securing it with masking tape or a few track nails.
Position your model railroad track on the roadbed and hold it in place with a few track nails.
Hook up leads from your power supply to the track.
Test the engine to make sure it will pull cars up the grade before securing the roadbed and track with glue and nails. Since not all engines are created equal, you may have to modify the grade to accommodate some trains.
Remember to consider clearance requirements when building your layout. Make sure your engines and cars can pass through any bridge or tunnel you might create. Do not put a turnout in a grade or near the bottom of a grade as this will cause derailments. For some situations you may want to try a "vertical easement" grade which starts with a more gentle 1 % grade and graduates to a slightly steeper slope. There are lots of track plans available in books and magazines that will solve the grade problem for you.
Extruded foam insulation will work great to form the basis of a landscape, but you cannot cut it with a hot foam knife. It releases toxic gases that can cause severe illness and even death in people with respiratory problems. However, commercially available landscaping foam can be cut with a hot knife.