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When It Pays to Think Like a Finance Manager

Harvard Business Review

If you want approval for a new project — purchasing new equipment or computer systems, applying for a patent, building a new store — chances are you need your company’s finance department on board. To get the green light, it helps to understand how finance people think. Finance & Accounting Tool.

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A Refresher on Internal Rate of Return

Harvard Business Review

Any time you propose a capital expenditure, you can be sure senior leaders will want to know what the return on investment (ROI) is. There are a variety of methods you can use to calculate ROI — net present value , payback, breakeven — and internal rate of return , or IRR. Finance & Accounting Article.

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

Harvard Business Review

” “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. ” Negative NPV. “You can see that if you go three years out, the NPV is still negative on our investment.