Harvard Business Review

APRIL 30, 2015

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? “The cost of capital is simply the return expected by those who provide capital for the business,” says Knight. Further Reading.

Cost of Capital 8

Cost of Capital Cost Finance Discount 8

Harvard Business Review

JUNE 22, 2016

The use of FinTechs allows suppliers to access funding at the multinationals firm’s lower cost of capital.). Many FinTechs function as cloud-based software platforms and can enable “procure-to-pay” systems that incorporate both purchasing management and accounts payable functionality.

Supply Chain 10

Supply Chain Cost of Capital Transportation Finance 10

Harvard Business Review

OCTOBER 25, 2018

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.)

Industry 12

Industry Company GDP Bottom-up 12

Harvard Business Review

JULY 25, 2017

Some companies establish a threshold for MROI that takes into account its risk tolerance and cost of capital, below which they are hesitant to make investments. ” Avery points out that several companies now sell marketing mix software, which uses complex algorithms to help managers disentangle the attribution problem.

ROI 8

ROI Marketing Marketing Mix Short-term 8

Harvard Business Review

AUGUST 27, 2015

Companies in the top one-fifth of profitability earn, in aggregate, about 70 times more economic profit (accounting profit less cost of capital) than those in the middle three-fifths combined, according to McKinsey’s database of 3,000 large, publicly listed, nonfinancial U.S. Consider what’s happening among corporations.

ROIC 8

ROIC McKinsey GDP Company 8

Strategy Driven

SEPTEMBER 9, 2011

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. They can hire an individual to manage it, they can outsource the office management, they could sign up with a software service platform like Microsoft to run it for them.

Innovation 50

Innovation NPV Business Model Constraint 50