Net Income

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