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When It Pays to Think Like a Finance Manager

Harvard Business Review

Do you think they’re going to do a net present value (NPV) analysis that shows they don’t need that computer? If the numbers show a negative NPV, meaning that the proposed investment isn’t justified, they change the assumptions until the NPV turns up positive. Not long after, the board fired the CEO.

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The Worst Failure of All Is Wasting a Failure

Harvard Business Review

The CEO and CFO responded with, "A failure to hit ROI and NPV targets." To state that it didn't hit ROI, or whatever the metric is, doesn't answer the question. Clearly the company was painfully aware of these two failed projects. The problem came with the follow-up question, "Why did example A fail?".

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Case Study: Should a Hotelier Invest in a New Kind of Online Travel Agency?

Harvard Business Review

Gerard nodded toward the front of the room, where Dan Carlson, the CEO of HotelShield, stood at a podium, PowerPoint clicker at the ready. ” “I have Carly running the ROI — both short-term and long-term,” he said, referring to Carly Janssen, his finance director, “but I have to say that I find it intriguing.