##### Asked by: Rahal Jernakov

asked in category: General Last Updated: 7th April, 2020# How do you calculate present value of project management?

**Present Value**(

**NPV**) of the sum of all cash inflows (in

**Present Value**) of the

**project**minus the initial cost, i.e.

**PV**(benefits) –

**PV**(costs) (Read more)

**NPV**is an effective tool to help determining whether a

**project**will be profitable,

**NPV**> 0 - the…

In this regard, how do you calculate NPV in project management?

=**NPV**(discount rate, series of cash flow) **Example** of how to use the **NPV** function: Step 1: Set a discount rate in a cell. Step 2: Establish a series of cash flows (must be in consecutive cells). Step 3: Type “=**NPV**(“ and select the discount rate “,” then select the cash flow cells and “)”.

Additionally, what is NPV in project management? **Net present value** (**NPV**) is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. **NPV** is used in capital budgeting and investment planning to analyze the profitability of a projected investment or **project**.

Also question is, how do you calculate the value of a project?

It is **calculated** by deducting the expected costs or investment of a **project** from its expected revenue and then dividing this (net profit) by the expected costs in order to get a return rate. Other factors such as inflation and interest rates on borrowed money may be factored into ROI **calculations**.

What is opportunity cost in project management?

**Opportunity cost** is the loss of potential future return from the best alternative **project** when a choice is required for several mutually exclusive projects. It can also be defined as “the **opportunity** (potential return) that will NOT be realized for the second best **project** not selected”.