Remove Management Remove NPV Remove Present Value
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Rethinking Valuation So You Don't Miss a Good Deal

Harvard Business Review

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.

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Will You Be Writing Off Your Investment in Egypt?

Harvard Business Review

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.

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How Marketers Can Avoid Big Data Blind Spots

Harvard Business Review

That estimate then needs to be tested and adjusted systematically based on the unique situation of the company using the experience and judgment of marketing and sales managers, as well as other internal data (e.g. customer surveys). typically are short-term calls to action and contribute little to building the brand and consumer loyalty.

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A Refresher on Internal Rate of Return

Harvard Business Review

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.

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When It Pays to Think Like a Finance Manager

Harvard Business Review

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?

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Why Some Digital Companies Should Delay Profitability for as Long as They Can

Harvard Business Review

As long as there are strong increasing returns to create , it’s possible that the net present value of my profit harvesting is indefinitely larger if deferred to the future. The Refresher: Net Present Value. Next time you're deciding about a big investment, NPV can help you make a more informed decision.

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What If Investors Who Held Their Shares Longer Got More Voting Power?

Harvard Business Review

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. There is no difference whatsoever.

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