Harvard Business Review

MARCH 10, 2011

When executives evaluate a potential investment, whether it's to build a new plant, enter a new market, or acquire a company, they weigh its cost against the future cash flows they expect will spring from it. To make sure they're comparing apples to apples, they discount those future cash flows to arrive at their net present value.

CAPM 14

CAPM Cost Discounted Cash Flow Cost of Capital 14

Harvard Business Review

NOVEMBER 25, 2013

Without a strong business case built on analytics, marketing too often is seen as a cost rather than an investment, despite marketing’s ability to drive above-market growth. CFOs are more interested in capital investment estimates, net present values, and a clear outline of the trade-offs of any investment.

CFO 8

CFO Short-term Long-term Benchmarking 8

Harvard Business Review

JUNE 18, 2015

In operational engineering, PE firms develop industry and operating expertise that they bring to bear to add value to their portfolio companies. Rather, they rely on internal rates of return and multiples of invested capital.

CAPM 8

CAPM Discounted Cash Flow Company Rate of Return 8

Harvard Business Review

APRIL 2, 2014

Campbell’s work has also made liberal use of the analytic tools developed by Hansen. You know, the future value of money, the present value of money — money today is worth more than in the future because you can invest it and get interest. You’re going to have to take a worst reasonable case.

CAPM 8

CAPM Discount Price Finance 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. 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.

Innovation 50

Innovation NPV Business Model Constraint 50