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9 July 2008

Net Present Value

I have to tell you, this is a topic that I am no expert in. I rarely actually put togther NPV calculations. Usually where I work a finance person will do them rather than a pm.

But I need to be able to explain it to people.

I can explain this; NPV is a way of assessing differet projects over different time periods. It helps pick and choose what goes into your project portfolio. It helps understand whether the project meets the opportunity cost thresholds your organisation has set.

And the calculations themselevs are easy enough once you know how to use the excel NPV feature.

But explaining it still stumps me. This is me having a go.

Someone - Help me out and do a better job.