Harvard Business Review

DECEMBER 2, 2010

Since the Three Horizons represent different levels of uncertainty, they need to be managed and valued differently. The higher level of uncertainty associated with H2 and H3 necessitates an updated valuation methodology that takes into account more than the net present value (NPV) of the target. Alexander B.

NPV 15

NPV Net Present Value Price Engineering 15

Harvard Business Review

FEBRUARY 24, 2011

Imagine if managements, boards, and investors adopted them: we could restart our economy, energize our business school curricula and create prosperity for our children and grandchildren. But why compare apples (book value) to oranges (share price and dividends)? In all but seven of these 45 years, Berkshire beat the S&P.

Letter 15

Letter P&L Net Present Value Insurance 15

Harvard Business Review

FEBRUARY 7, 2011

With political upheaval roiling the streets of Cairo, the first concern of top management in many multinationals is to get their employees and their families out of Egypt safely. Anyone who has had to make the argument for an investment knows the basic tool involved: a Net Present Value (NPV) calculation.

NPV 15

NPV Short-term Discount Politics 15

Harvard Business Review

APRIL 27, 2017

But I long for actions that go beyond admonitions to managers and boards to do better, that give both parties a better chance to stand up to capital markets players, like activist hedge funds, pressuring them to become too short-term focused. The Refresher: Net Present Value. Related Video.

Hedge 12

Hedge Short-term Long-term NPV 12

Harvard Business Review

JUNE 8, 2018

Business students have traditionally considered net present value, payback period, and hurdle rates as necessary tools to determine which project to select. So, investors, and therefore managers, might be adjusting their approach to risk accordingly. Traditional companies therefore rely on two strategies.

Report 11

Report GAAP Net Present Value CFO 11

Harvard Business Review

APRIL 18, 2016

There are a variety of ways to calculate a return on investment (ROI) — net present value , internal rate of return , breakeven — but the simplest is payback period. A Refresher on Net Present Value. For that reason, net present value is often the preferred method.

Payback Period 8

Payback Period Net Present Value ROI Rate of Return 8

Harvard Business Review

SEPTEMBER 13, 2017

We found that sustainable and deforestation-free practices created significant financial benefits for all players in the industry’s value chain. Specifically, our analysis found that the net benefits to ranchers ranged from $18 million to $34 million (12% to 23% of revenues) in net present value projected over 10 years.

Supply Chain 9

Supply Chain Net Present Value Retail Cost of Capital 9

Harvard Business Review

MARCH 23, 2015

Most finance managers in both large and small businesses encounter numerous proposals for capital investments and many of the people proposing these investments don’t have a clear picture of what the return will be. Do you think they’re going to do a net present value (NPV) analysis that shows they don’t need that computer?

Finance 8

Finance NPV CFO ROI 8

Harvard Business Review

MARCH 17, 2016

There are a variety of methods you can use to calculate ROI — net present value , payback, breakeven — and internal rate of return , or IRR. According to Knight, it’s commonly used by financial analysts in conjunction with net present value, or NPV. A Refresher on Net Present Value.

Rate of Return 8

Rate of Return IRR NPV Net Present Value 8

Harvard Business Review

MAY 1, 2017

In these circumstances, strategies that generate faster growth create more value for most companies than those that improve profit margins. The Refresher: Net Present Value. Related Video. Next time you're deciding about a big investment, NPV can help you make a more informed decision.

ROE 16

ROE Long-term GDP Six Sigma 16

Harvard Business Review

OCTOBER 15, 2012

As innovators engage with the market through the MVP, they learn valuable information to help them refine the product-market fit and better understand and further build for the value proposition. Net Present Value ). This iterative approach is consistent with "real options" (vs.

Innovation 10

Innovation Execution Net Present Value Open-book 10

Harvard Business Review

SEPTEMBER 27, 2012

Managers in these organizations translate corporate objectives into a few straightforward guidelines that help employees make on-the-spot decisions and adapt to constantly shifting environments, while keeping the big picture in mind. Its new management team took over an organization that was bureaucratic, overstaffed, and bleeding cash.

Strategy 9

Strategy Proposal Guidelines Net Present Value 9

Harvard Business Review

DECEMBER 2, 2013

I can’t imagine, recalling my days at Rio Tinto, the managers of a copper mine measuring and proudly reporting how much dirt was moved, how deep the hole was, and how many trucks they had procured – while staying mum about how much copper was produced. To a business person, think how absurd this would seem.

Trends 9

Trends Development Net Present Value NGO 9

Harvard Business Review

NOVEMBER 25, 2013

CFOs are more interested in capital investment estimates, net present values, and a clear outline of the trade-offs of any investment. CMOs can use advanced analytics and judgment to manage the trade-off between short-term spending to boost sales and longer-term brand building to support the health of the company.

CFO 9

CFO Short-term Long-term Benchmarking 9

Harvard Business Review

AUGUST 15, 2016

Most executives know that the present value of an investment comes from projecting its cash flows and discounting those numbers into today’s dollars. The general rule is projects with positive net present values should get funded, and those with negative ones shouldn’t.

Net Present Value 8

Net Present Value Entrepreneur Christensen Innovation 8

Harvard Business Review

MARCH 31, 2017

But having a grasp of terms like EBITDA and net present value are important no matter where you sit on the org chart. The Refresher: Net Present Value. Identify a trustworthy operations or financial manager who can help answer your questions and serve as a sounding board. Related Video. Go it alone.

Finance 8

Finance Skills EBITDA Net Present Value 8

Harvard Business Review

APRIL 9, 2015

Analyzing ROI isn’t always as simple as it sounds and there’s one mistake that many managers make: confusing cash and profit. You can use one or more of four ROI calculation methods: payback, net present value , internal rate of return, and profitability index. Financial analysis Project management'

ROI 8

ROI Analysis Rate of Return Net Present Value 8

Harvard Business Review

MARCH 29, 2018

A second, more radical solution is to create budgets and authority for a service line or integrated practice unit (IPU) that manages a patient’s entire treatment for a high-volume medical condition. The IPU is an essential component of the value-based care model advocated by Harvard Business School’s Michael Porter.

Budgeting 9

Budgeting System Innovation Payback Period 9

Harvard Business Review

JUNE 18, 2015

What have been less explored are the specific actions taken by private equity (PE) fund managers. In a survey of 79 PE firms managing more than $750 billion in capital, we provide granular information on PE managers’ practices and how firms’ strategies relate to the characteristics of their founders.

CAPM 8

CAPM Discounted Cash Flow Company Rate of Return 8

Harvard Business Review

JUNE 22, 2015

“It’s one of the more popular ways that managers calculate marketing ROI,” says Avery, pointing out that other common ones include calculating the investment payback period, calculating an internal rate of return, and using net present value analysis. BEQ = 200 units.

Payback Period 8

Payback Period Fixed Costs Analysis Price 8

Harvard Business Review

AUGUST 21, 2015

This is one of the key metrics for marketing managers, says Avery. “Our job is to create products and services that have unique and sustainable value for customers compared with other options available to them in the marketplace. ” What are some of the common mistakes managers make with price elasticity?

Price 8

Price Debt to Equity Ratio Marketing Net Present Value 8

Strategy Driven

SEPTEMBER 9, 2011

Many conventional metrics we use to estimate value are based on faulty assumptions. Net present value [NPV] is a case in point. Yet for the small handful of companies that have managed to drive growth consistently – even through tough times – the payoff is great. How do they do it?

Innovation 50

Innovation NPV Business Model Constraint 50