Net Present Value (NPV)

Method for financial evaluation of long-term projects. Also described as Present Value of Cash inflow / benefits my Present Value of Cash Outflow / Costs.

NPV compares the value of the future cash flows of the project to today's dollars using time value of money techniques.

It evaluates the cash inflows using the discounted cash flow technique, which is applied to each period the inflows are expected. The total present value of the cash flows is deducted from the initial investment to determine NPV.

NPV assumes that cash inflows are reinvested at the cost of capital.

NPV is similar to discounted cash flow.

Positive NPV is good.
Negative NPV is bad.
The project with the higher NPV is the "Better" project.

Process Groups and Knowledge areas

(Based on PMBOK 3rd Edition. For PMP Certification Exam preparation) To manage Projects effectively those should be divided Phases and smallest possible sub phases. This iterative process should go up to the level where further division creates chaos rather than helping the project. In database terminology we call this as "Atomic" level.
Projects can be managed easily by Phased approach. PMBOK defined and explained processes to manage these sub atomic processes. As per PMBOK3rd edition guide there are 44 processes and grouped in to 5 major Process Groups. 5 Process groups are  Initiation Planning Executing Monitoring & Control Closing.  Certain INPUTS are given to the process. Managers use said TOOLS available for that process to produce OUTPUTS. PMBOK guide also defines Knowledge Areas for the Project Managers. Managers will use these skills (Knowledge) to work on given INPUTS using TOOLS to produce OUTPUTS. Those are Project Integration Management  Project Scope Management  Project Cost Management  Project Time Management  Project Risk Management  Project Quality Management  Project HR Management Project Communication Management  Project Procurement Management Effective Project Management requires knowledge and skills from following 5 areas  The Project Management Body of Knowledge (5 process groups and 9 knowledge areas) Application area knowledge, standards, and regulations Understanding the project environment General management knowledge and skills Interpersonal skills.     Initiation Planning Executing Monitoring and Controlling Closing Integration  4.1 Develop Project Charter 4.2 Develop Preliminary Project Scope Statement  4.3 Develop Project Management Plan  4.4 Direct & Manage Project Execution 4.5 Monitor & Control Project Work 4.6 Integrated Change Control   4.7 Close Project    Scope     5.1 Scope Planning 5.2 Scope Definition 5.3 Create Work Breakdown Structure (WBS)       5.4 Scope Verification 5.5 Scope Control      Time      6.1 Activity Definition 6.2 Activity Sequencing 6.3 Activity Resource Estimating 6.4 Activity Duration Estimation 6.5 Schedule Development      6.6 Schedule Control     Cost      7.1 Cost Estimating 7.2 Cost Budgeting      7.3 Cost Control     Quality      8.1 Quality Planning  8.2 Perform Quality Assurance  8.3 Perform Quality Control     HR      9.1 Human Resources Planning  9.2 Acquire Project Team 9.3 Develop Project Team  9.4 Manage Project Team     Communications      10.1 Communication Planning 10.2 Information Distribution 10.3 Performance Reporting 10.4 Manage Stakeholders     Risk      11.1 Risk Management Planning 11.2 Risk Identification 11.3 Qualitative Risk Analysis 11.4 Quantitative Risk Analysis 11.5 Risk Response Planning     11.6 Risk Monitoring and Control     Procurement      12.1 Plan Purchases and Acquisitions 12.2 Plan Contracting   12.3 Request Seller Responses 12.4 Select Sellers 12.5 Contract Administration  12.6 Contract Closure Project documents: PMBOK suggest managers to produce at-least 3 major documents for each project Project Charter Project Scope Statement Project Management Plan. (Notice, MS Project Plan is just one section of the bigger document). It has components to represent knowledge areas listed above Scope Management Plan Schedule Management Plan Cost Management Plan Quality Management Plan Staffing Management Plan Communication Management Plan Risk Management Plan Procurement Management Plan