Net Income

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The accounting measure of a project operating period after-tax profit is called net profit.

NP = Σ R - Σ E         (1)

where

NP = net profit (or net income)

R = project revenues

E = project expenses

Project expenses includes all costs needed to generate the revenue, including

• labor
• material
• services
• inventory
• supplies
• depreciation
• employee's salaries
• renting buildings
• insurance coverage
• income taxes

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Related Topics

• Economics - Engineering economic concepts - cash flow diagrams, discount rate, internal rate of return - IRR, income taxes, inflation

Related Documents

• Income Taxes - Taxable income and income taxes
• Operating Profit - Generated profit or income