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Still Many Ways to Skin a Capital Cost

Harvard Business Review

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 13
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How to Quantify Sustainability’s Impact on Your Bottom Line

Harvard Business Review

We found that sustainable and deforestation-free practices created significant financial benefits for all players in the industry’s value chain. Specifically, our analysis found that the net benefits to ranchers ranged from $18 million to $34 million (12% to 23% of revenues) in net present value projected over 10 years.

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The Most Common Mistake People Make In Calculating ROI

Harvard Business Review

But before anyone writes a check, you need to calculate the return on investment (ROI) by comparing the expected benefits with the costs. Analyzing ROI isn’t always as simple as it sounds and there’s one mistake that many managers make: confusing cash and profit. Financial analysis Project management'

ROI 8
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What Shareholder Value is Really About

Harvard Business Review

Creating Shareholder Value. Critics imply that managing for shareholder value is all about maximizing the short-term stock price. Companies that manage for shareholder value, the thinking goes, do whatever it takes to engineer an ever-higher market price. That is a profound misunderstanding.

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What Private Equity Investors Think They Do for the Companies They Buy

Harvard Business Review

What have been less explored are the specific actions taken by private equity (PE) fund managers. In a survey of 79 PE firms managing more than $750 billion in capital, we provide granular information on PE managers’ practices and how firms’ strategies relate to the characteristics of their founders.

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A Refresher on Price Elasticity

Harvard Business Review

This is one of the key metrics for marketing managers, says Avery. “Our job is to create products and services that have unique and sustainable value for customers compared with other options available to them in the marketplace. ” What are some of the common mistakes managers make with price elasticity?

Price 8
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An HBR Refresher on Breakeven Quantity

Harvard Business Review

“It’s one of the more popular ways that managers calculate marketing ROI,” says Avery, pointing out that other common ones include calculating the investment payback period, calculating an internal rate of return, and using net present value analysis. How do you calculate it? BEQ = 200 units.