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Net Present Value and Risk Modelling For Projects

BOOK REVIEW

Book Title:   Net Present Value and Risk Modelling For Projects
Author: Martin Hopkinson
Publisher: Routledge – Taylor & Francis Group
List Price:   $54.95
Format: Soft cover, 168 pages
Publication Date:  2016    
ISBN: 9781472457967
Reviewer:     Ash Jantrania
Review Date: Feb 2017


Introduction

During the project selection process, we need to make the right decision on determining project feasibility.

In order to do this, we need to perform the cost-benefit analysis by forecasting a financial number of a project’s benefits. The Net Present Value (NPV) is traditionally used to arrive at this number. The book suggests conducting NPV risk modelling for better visibility.

Overview of Book’s Structure

The Net Present Value (NPV) forecast forms core of the business case on majority of projects. The author explains when and how the NPV model approach can be integrated with the risk management process.

At the beginning of the project life cycle, when uncertainty is at its highest and when the opportunities to influence the project’s plan are at their greatest, NPV models are typically used.

The author has highlighted how an integrated approach of combining project financial forecasting and risk management principles can be used to improve NPV forecast numbers.

Highlights

The book provides an understanding to the foundation concepts and advantages of using Net Present Value approach, its calculation with detailed illustrations.

The author Martin Hopkinson has provided interesting worked examples, comparisons and limitations of financial modelling approaches to evaluate a project’s feasibility.

A detailed explanation of Discount Rates, Internal Rate of Return (IRR) Payback Periods and Developing a Net Present Value Model has also been provided with examples as well as graphical illustrations.

More…

To read entire Book Review, click here

 


 

About the Reviewer


Ash Jantrania

North Texas, USA

 


Jantrania, PMP, CSM, Six Sigma Green Belt
is a seasoned Project Manager based in the Dallas Fort Worth area of north Texas, USA. He has extensive Project Management and Business / Systems analysis experience in Telecom, Transport, Mortgage Banking, Health, E-Commerce, Retail & Non Profit organizations. Ash holds PMP, Scrum Master and Six Sigma certifications and has comprehensive knowledge of project management in both Waterfall and Agile/Scrum methodologies. He can be contacted at ajant1@yahoo.com.

 

Editor’s note: This book review was the result of a partnership between the publisher, PM World and the PMI Dallas Chapter. Authors and publishers provide the books to PM World; books are delivered to the PMI Dallas Chapter, where they are offered free to PMI members to review; book reviews are published in the PM World Journal and PM World Library. PMI Dallas Chapter members can keep the books as well as claim PDUs for PMP recertification when their reviews are published. Chapter members are generally mid-career professionals, the audience for most project management books.

If you are an author or publisher of a project management-related book, and would like the book reviewed through this program, please contact editor@pmworldjournal.net.