Harvard Business Review

MARCH 17, 2016

According to Knight, it’s commonly used by financial analysts in conjunction with net present value, or NPV. With NPV you assume a particular discount rate for your company, then calculate the present value of the investment ( more here on NPV ). ” The downside is that IRR is much more conceptual than NPV.

Rate of Return 8

Rate of Return IRR NPV Net Present Value 8

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

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. Critics of this idea argue that it would simply ensconce bad management. Related Video.

Hedge 12

Hedge Short-term Long-term NPV 12

Harvard Business Review

MAY 4, 2017

Next time you're deciding about a big investment, NPV can help you make a more informed decision. And that is a very important difference driving the behavior of managers in industrial era firms. Today, AWS is a much more valuable business for the company’s long-termism. So is Facebook. So is Google. The list goes on.

Collison 14

Collison Net Present Value Company Short-term 14

Harvard Business Review

MAY 1, 2017

Next time you're deciding about a big investment, NPV can help you make a more informed decision. Even when an organization has a robust pipeline of growth ideas and manages to keep many of them alive, it may lack the human capital needed to accelerate growth. Related Video. The Refresher: Net Present Value.

ROE 16

ROE Long-term GDP Six Sigma 16

Harvard Business Review

AUGUST 4, 2014

“Importantly, this will be a much simpler, much less complex company of leading brands that’s easier to manage and operate.” ” Choosing to lead and manage in accord with that empirical insight has enormous organizational and operation repercussions. ” Does the leaner, meaner, and refocused Lafley 2.0

Brand 9

Brand DCF IRR NPV 9

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

MARCH 31, 2017

Next time you're deciding about a big investment, NPV can help you make a more informed decision. “You’re not managing specific business decisions, you’re trying to understand and internalize how the models work” and the assumptions they make. Related Video. The Refresher: Net Present Value. Go it alone.

Finance 8

Finance Skills EBITDA Net Present Value 8

Strategy Driven

SEPTEMBER 9, 2011

Net present value [NPV] is a case in point. The logic of NPV is to project cash flows into the future and then discount those flows back into today’s dollars at a given cost of capital. Yet for the small handful of companies that have managed to drive growth consistently – even through tough times – the payoff is great.

Innovation 50

Innovation NPV Business Model Constraint 50