Example of a Project That Is Underway

Now consider the same example when the current month (month 0) is June and the project is underway. Assume that the actual value for Benefit – Cost was as forecast for May and that, thus far in June, actual costs and actual benefits are lower than forecast costs and forecast benefits, so that the forecast data is used for June. Then, as of June, the total NPV is the sum of the following amounts (rounding off to the nearest dollar):

  • $10,000 for May

  • $30,000 for June

  • $100,000 / (1.005) 1 = $99,502 for July

  • $135,000 / (1.005) 2 = $133,660 for August

For this example, the total NPV is $273,162.