Last edited 12 Feb 2019

Net present cost in the construction industry

The New Rules of Measurement (NRM) are published by the Royal Institute of Chartered Surveyors (RICS). They provide a standard set of measurement rules for estimating, cost planning, procurement and whole-life costing for construction projects.

According to NRM3: Order of cost estimating and cost planning for building maintenance works, the term ‘net present cost’ (NPC) refers to:

‘…the sum of the present values of all costs less the sum of the present value of all benefits.’

The term ‘net present value’ (NPV) refers to:

‘…the aggregated sum of the future income and expenditure discounted back to a common base date, usually the present day, at a given compound interest rate.’

According to NRM3, where only costs are included in the NPV this may be termed the net present cost.

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