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Sustainable Investment Funds Can Encourage Worse Behavior

The Horizons Tracker

Subsequently, leveraging historical data, the researchers evaluated the responses of the highest and lowest polluting groups to fluctuations in their capital costs, an impact similar to the objectives of the sustainable investing movement.

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A Refresher on Cost of Capital

Harvard Business Review

You’ve got an idea for a new product line, a way to revamp your inventory management system, or a piece of equipment that will make your work easier. You’ll likely be asked to show that the return on the investment will be better than your company’s cost of capital. What is the cost of capital?

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Entrepreneurship Suffers When Well-Paid Jobs Are Plentiful

The Horizons Tracker

They believe that their findings add additional nuance to the current narrative that suggests that the decline in entrepreneurship is largely a consequence of higher startup costs, labor constraints, or even the aging population. Opportunity costs. Instead, you may want to ask how to make existing entrepreneurs more productive.”.

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The Rise of FinTech in Supply Chains

Harvard Business Review

The use of FinTechs allows suppliers to access funding at the multinationals firm’s lower cost of capital.). The supplier gives the buying firm a discount on the invoice amount at the buyer’s lower cost of capital. The buying firm benefits through longer payables, which positively impact its working capital.

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CEOs Don’t Care Enough About Capital Allocation

Harvard Business Review

” A quarter century later, not much seems to have changed: fewer than five out of the 100 CEOs on HBR’s 2014 list of best-performing CEOs even mention “return on capital” on their official biography — and none of those five lead companies listed in the Dow Jones Industrial Average (DJIA) or in the EuroStoxx50.

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What’s Driving Superstar Companies, Industries, and Cities

Harvard Business Review

To analyze the superstar dynamics of firms, our metric was economic profit, a measure of a firm’s profit above and beyond opportunity cost. (To To do this, we take the firm’s returns, deduct the cost of capital, and multiply by the firm’s total invested capital.)

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The Most Common Mistake People Make In Calculating ROI

Harvard Business Review

Sure, you may know this already, but people who haven’t studied finance often find this statement confusing. Finance & Accounting Tool. You might also find that your accounts receivable (A/R) — what customers owe you for services rendered or products delivered — rises by $1 million. Excerpted from.

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