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Net Income

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

NP = Σ R - Σ E         (1)


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


Engineering economics - cash flow diagrams, present value, discount rates, internal rates of return - IRR, income taxes, inflation.

Related Documents

Income Tax

Income tax vs. taxable income.

Operating Profit

Profit is made when revenue exceeds costs.

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