Net income is profit! It’s the money you get to keep after you’ve paid all of your expenses. Think back to the oil change example introduced earlier. For regular oil changes, you charge $10. You do have some expenses though. For each oil change you perform you have to buy oil and a filter, which cost you a total of $4. To determine how much profit or net income you make on each oil change you subtract your expenses from your revenue. $10 (revenue) - $4 (expenses) means you make a net income or profit of $6 per oil change.

To calculate net income you subtract total expenses from total revenue.

Total revenue – total expenses = Net Income

As you have in previous steps, you need to calculate net income for each year of the project.