Net Present Value and Risk Modelling for Projects

Martin Hopkinson is the Director of Risk Management Capability Limited and has 30 years’ experience as a project manager, project risk specialist and consultant. His experience has been gained across a wide variety of industries and engineering disciplines and includes multi-billion pound projects and programmes. Martin’s previous book The Project Risk Maturity Model , concerns the risk management process and his contributions to Association for Project Management guides such as Directing Change and Sponsoring Change reveal his belief in the importance of project governance and business case development. In this book he brings these subjects together by showing how NPV and risk modelling techniques can be used to optimise projects and support project approval decisions.

'The book is well-reasoned and well-written. It provides a lot of insight in an accessible form. I particularly like Martin's attention to the parallel and integrated consideration of: (1) uncertainties of time and cost in construction, with (2) uncertainties in operations (operating costs, efficiency and market prices). The unifying theme of Net Present Value, reflecting the time value of money, is a way to incorporate these into useful strategic decision-making about and management of projects.' David T. Hulett, FAACE, President at Hulett & Associates, LLC

• Preface Chapter 1 Background to Project Net Present Value and Risk Modelling Chapter 2 Three Financial Modelling Techniques Compared: Undiscounted Cash Flows, Project NPV and NPV Risk Modelling Chapter 3 Discount Rates, Internal Rate of Return and Payback Periods Chapter 4 Developing a Net Present Value Model Chapter 5 Project Risk Management: Themes Relevant to NPV Risk Modelling Chapter 6 Building up Detail in a Net Present Value Risk Model Chapter 7 Risk Estimating Appendix Risk Tools