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)
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 economics - cash flow diagrams, present value, discount rates, internal rates of return - IRR, income taxes, inflation.
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Income Tax
Income tax vs. taxable income.
Operating Profit
Profit is made when revenue exceeds costs.
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